Homework Question on Inventory Management Customer Satisfaction
- What is inventory management?
- What is the problem in this case?
- What are some of the solutions?
- Evaluate these solutions
- Conclusion
Homework Answer on Inventory Management Customer Satisfaction
Inventory management refers to the controlling and overseeing of the storage, ordering and use of the components that an organization will apply to items production inclusive of the regulation of the quantities of the products finished for sale. Inventory is the materials used for primary manufacturing or production of a good, the goods undergoing production and the goods finished considered ready for sale. Inventory is one of the major assets that a business owns because an inventory turnover depicts the revenue generation primary sources and the successive earnings for shareholders of the company.
It is an expense to stockpile, record and provide insurance for inventory. Mismanaged inventories can create critical financial problems to a business whether the results of the mismanagement are inventory surplus or shortage. An inventory management that is successful will involve the creation of purchasing plan which will ensure the availability of items when their need arises and to keep track of the current inventory and its usage.
Two standard inventory management methods are materials requirement system that slates deliveries of materials by sales forecasts and the just-in-time strategy in which companies arrange to accept delivery of items as they are needed instead of keeping high levels of inventory. The problem facing ABC Company is the large inventory that has been caused by the presence several physical stores that sell its brands including books, CDs, and DVDs, though the physical stores are registering profit margins, the values are relatively low due to operational cost-payment of stores’ employees and lease fees.