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University of Dubai
Introduction to information system


Done by : BiLaL aLi


Why is AutoNation having a problem with its inventory?

AutoNation is having a problem with its inventory. That is that they have to maintain an excessive inventory that it can't easily sell. Because of Detroit’s century-old business model, which is still continue from the dates of Henry Ford's mass production of millions of largely identical Model T's. Rather than build cars to suit customer’s preferences, Most of the U.S. car makers are production oriented but not customer oriented therefore they have to put an extra effort to sell the cars to the customers. Vehicles like SUVs and pickup trucks become outcast. That case booms the question that is can the automakers will be able to sell all the cars they have. Current situation of American economy make this worse. With the slumping economy and very high gas prices, now Americans can't think of affording new vehicles like in past. They want smaller and more fuel-efficient vehicle models. AutoNation, they are being loaded with the unwanted inventory which results in stocking up there yards and also getting them costs such as interests on the money that had been borrowed from the bank. And also dealers often have a surplus of new cars sitting in their lots for months at a time that no one wants to buy it.

Why is this also a problem for auto manufacturers such as GM, Ford, and Chrysler?
This is also a problem for auto manufacturers such as GM, Ford, and Chrysler because their manufacturing process are not setup to quickly change their production models and have been geared towards optimizing the efficiency of the production plant. It becomes imperative for the manufacturers to keep their plants running regardless of demand to pay for the rising costs of employee…...

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