Answer to Question #252586 in Management for amit

Question

List down briefly the various inventory management techniques prevalent in the industry. Discuss how some of these techniques would be applicable to a General Store in effective management of their inventories; i.e. grocery supplies, etc. (assume several inventories of your choice).

Answer 1

The inventory management techniques that grocery supplying companies may need includes:

1.     Bulk shipment

2.     ABC inventory management

3.     Backordering

4.     Inventory Cycle counting

Bulk Shipments

 

This method banks on the notion that it is almost always cheaper to purchase and ship goods in bulk. Bulk shipping is one of the predominant techniques in the industry, which can be applied for goods with high customer demand like grocery supplies.

ABC Inventory Management

ABC inventory management is a technique that’s based on putting products into categories in order of importance, with A being the most valuable and C being the least. Not all products are of equal value and more attention should be paid to more popular products.

Backordering

Backordering refers to a company’s decision to take orders and receive payments for out-of-stock products.

Inventory Cycle Counting

Cycle counting or involves counting a small amount of inventory on a specific day without having to do an entire manual stock take. It’s a type of sampling that allows you to see how accurately your inventory records match up with what you actually have in stock.