inventory management - f

8/17/2019 Inventory Management - F

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INVENTOR

MANAGEME


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INTRODUCTION

• The efficiency of a retail store is based on the retailer’s ability to provide

goods to the consumer, in the right quality, in the right quantity, at the righin right time. The entire process of retailing depends on the efficient inven

management.

• Inventory management is one area that differentiates successful and unsuc

retail stores. Inventory control is not just a materials management or ware

department issue.

• The purchasing, receiving, engineering, displaying, and accounting depar

contribute to the accuracy of the inventory methods and records. Inaccura

management will contribute to dispatch delays, shortage in stores, purcha

wrong inventory and stocking too much inventory.

• Regardless of the type of retail store department store, super market, hyp

specialty retailer or convenience store, etc.!, deficient areas all seem to re


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Inventory: Meaning and Definitio

Inventory represents a detailed list of all the items in stock.

Inventory includes" raw materials, finished products and supplies.

#n inventory system is the set of policies and controls that monitors lev

inventory and determines what levels should be maintained, when stock

replenished, and how large orders should be.


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What is Inventory Management ?

• Inventory refers to the goods stocked for future use. $very retits own warehouse to stock the merchandise to be used when t

stock replenishes.

Inventory management refers to the storage of products to

the time of crisis.

•The retailer keeps a track of the stocked goods and makes suresurplus inventory to avoid being &out of stock'. (uch a procesas inventory management.


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Inventory is the stock of any item or resource may be food retai

retailing, grocery)apparel retailing! displayed in a retail store. It

stock of goods)items that a retailer keeps in store including reseselling to customers when they come to shop.

Inventory can be a liability as well as an asset. *or instance, larg

in stores requires larger warehouses and unnecessary increases m

and supervision cost which many times is the first indication of w

decisions in the inventory planning and scheduling.

(ome e%perts of the retail industry define inventory as the block

capital of a retail store in the form of goods. #s this is the blocke

capital of retail stores, ideally it should be as per store’s requirem

retailers have common practice of maintaining inventory.


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(ometimes, this inventory is maintained to take care of fluctudemand and lead time and in some cases it is maintained to t

of increasing price tendency of commodities or rebate in bul

Inventory is considered a current asset, and shown on the bal

sheet, generally at cost.

#nother definition of inventory is that it can be used to referof those items which are either held for sale in the normal co

business, or are in the process of production for sale i.e. disp

items!.


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Reasons for !o"ding Inventory

• Inventory management is a function of central importance in re

Improving productavailability and reducing overall working cainvestments, without jeopardi-ing the store performance is a tig

most inventory managers have to stroll and consequently it has

the objectives of the retail stores as a whole.

$nsuring continuity of selling activities by proper and timely su

goods

edge against price increases

/eet une%pected) variations in customers demand


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Reducing inventory holding cost by using appropriate inventory

management technique

(afeguard against price changes and inflation

(moothout variations in operation performances

Take advantage of quantity)price discounts

Transportation saving


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Important Termino"ogies used in Inventory manag

• #$U %#toc& $eeping Unit'

• $very product available at the store has a unique code. This code whicthe identification and tracking of the products at the retail store is callekeeping unit or (01.

• The retailer feeds each and every (01 in the master computer and cantrack the product in the stock just by entering the (01 2umber.

• #ssigning a unique code to the products avoids unnecessary searching

()amp"e" $%ample of &2umero 1no' which stocks denims, shirts, T (h

targets both men as well as women.


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• #$U for #hirts

• 21 3 /345*67

•

21 /89*6+

7here" 21 stands for 2umero 1no/ /en45 :ollar (i-e*6 *ull (leeves

7 7hite :olour of the shirt!In the same way + would stand for +lue

• (imply typing 21 3 /345*67 would let the retailer know w

particular merchandise is available with him or not.


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• Ne* O"d #toc& %+reviated as NO#'

The stock which is never been sold by the retailer and now not even manufactured comprises the new old stock. (uch products do not hav

and may not be produced anymore.

• #toc& out

(tock out refers to a situation when the retailer fails to fulfill the cust

requirement due to lack of merchandise. The merchandise is not avai

the current inventory and thus the customer has to return home empt


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Causes of ,oor Inventory Contro

There are certain factors, which lead to poor inventory control in

stores.

These are as follows

• +ulk buying due to avail discount or to cut down buying cost can lead to

inventory storage.

• ;ver buying inventory due to wrong forecasting.

• 7hen inventory acquisition is more as compare to consumption)sale.

• ;ver stocking due to some reasons sometimes result in poor customer ser

• :ancellation of delivery orders and unreliable and irregular supplies may

bulk inventory storage.


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,reventing "oss of inventory

In the situations when employees working at the store might get temthe merchandise. (ome advices need to followed which help to prev

inventory"

• :heck the bags of the employees before they leave the store.

• Raise an alarm whenever you find someone stealing something. (

wrong deed is also a crime.• /ake sure that all the employees leave from one common door.

• #void multiple e%its.

• :heck garbage before dumping.

• 0eep proper record of the inventory(tock coming in and going o


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T!+N$ -OU


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http://www.yourarticlelibrary.com/retailing/invenanagement-in-retail-store/48143/

• http://www.managementstudyguide.com/inventoement-in-retailing.htm
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