final komal inventory

8/8/2019 Final Komal Inventory

1/32

INVENTORY MANAGEMENTINVENTORY MANAGEMENT

PRESENTED BYPRESENTED BY --HARSHAHARSHA MULCHANDANIMULCHANDANI -- 1919KOMALKOMAL BHOJWANIBHOJWANI -- 2828

SANJEEVSANJEEV TOKASTOKAS -- 4848SOUMYADEEPSOUMYADEEP RAYRAY -- 5858TEJINDERTEJINDER SINGHSINGH 6363VIJAYVIJAY GUJRALGUJRAL 6767

1Retail Management - P5


2/32

WHY ARE INVENTORY IMPORTANTWHY ARE INVENTORY IMPORTANT

For a firm today : -a) Customer do not easily forget shortages or

delivery delays.

b) But tremendous stocks are costly.

c) Critical to a firm`s viability.

Concerns every industries: -

a) Nowadays : success stories like Wal-Mart,

Toyota, or Dell are founded on keeping

inventories lean. 2Retail Management - P5


3/32

INVENTORY MANAGEMENTINVENTORY MANAGEMENT

IN RETAILIN RETAIL

Carry the right inventory.

Carry the right amounts of

inventory.

Manage cash flow

Earn a profit 3Retail Management - P5


4/32

WHY IS IT DIFFICULTWHY IS IT DIFFICULT

Humongous Assortment Of Goods.Humongous Assortment Of Goods.

Consumer Preference is largelyConsumer Preference is largelywhimsical.whimsical.

Difficult To stock and keep track.Difficult To stock and keep track.



5/32


6/32



7/32

INVENTORY : BETWEEN SUPPLY &DEMANDINVENTORY : BETWEEN SUPPLY &DEMAND

Supply

ProcessDemand

Products Products

demand

Supply process:All activities that add new stock

Demand process:All activities that subtract material from the

inventory.

Function of an inventoryFrom the mismatches between supply and

demand.

To serve as a buffer.

Inventory

Demandprocess



8/32

MERCHANDISE PLANNINGMERCHANDISE PLANNING

FUNDAMENTALFUNDAMENTALInventory Management is based on a four PartEquation :

S

ales + EndingI

nventory BeginningI

nventory =Purchases .

Finding the missing Number.

Applying The Formula.



9/32


THE DIAMOND OF DOOMTHE DIAMOND OF DOOM


10/32

THE BASICSTHE BASICS

Inventory Investment Control

Inventory Replenishment

Sales Forecasting

Periodic Inventory Changes

Recording

I

nventory



11/32


12/32


13/32

TWO FUNDAMENTAL INVENTORYTWO FUNDAMENTAL INVENTORY

DECISIONSDECISIONSHow much to order of each material when

orders are placed with either outside suppliers

or production departments within organizations.

When to place the orders



14/32

INDEPENDENT DEMAND INVENTORYINDEPENDENT DEMAND INVENTORYSYSTEMSSYSTEMS

Demand for an item carried in inventory is

independent of the demand for any other item

in inventory.

Finished goods inventory is an example.

Demands are estimated from forecasts

and/or customer orders



15/32

DEPENDENT DEMAND INVENTORYDEPENDENT DEMAND INVENTORY

SYSTEMSSYSTEMSItems whose demand depends on the demands forother items

For example, the demand for raw materials andcomponents can be calculated from the demand for

finished goods

The systems used to manage these inventories are

different from those used to manage independent

demand items



16/32


17/32

QUANTITY DISCOUNT MODELQUANTITY DISCOUNT MODEL

Price reductions given for large purchases.

Rationale: obtain ecenomies of scale and pass

some (or all) of these savings on to the customer

.

The buyer must weigh the potential benefits of

reduced purchase price and fewer orders against

the increase in carrying cost caused by higherinventories.



18/32


VENDOR MANAGEVENDOR MANAGE

INVENTORYINVENTORY


19/32


Traditional Method


20/32


VIM Method


21/32


BENEFITSBENEFITS

Reduce Inventory Level.

Reduced Stock Out Problem.

Reduced Forecasting & Purchasing Activities

.


22/32

RFIDRFID SYSTEMSYSTEM RFID systems

a) 2 basics hardware components:-

transponder and an interrogator : tag and

reader.

b)Reader emits a radio wave at a certainfrequency that is received by the tag.

c)The tag is designed to respond with data that is

then read by the reader.

Goals

a) Electronic system : data mangement

b) To tightly follow and manage flows22Retail Management - P5


23/32



24/32

REALITY OF INVENTORYREALITY OF INVENTORYPLANNINGPLANNING

ABC Classification.



25/32


A B C ANALYSISA B C ANALYSIS

Always Better Control is an analyticaltechniques for classification of inventory items

was first introduced by an AMERICAN FIRM-

GENERAL ELECTRIC COMPANY.

According to this analysis, there are three

categories of inventory items A, B and C type

. Depending upon their percentages of

consumption.


26/32


The significance of this analysis is that a very

close ctrl is exercised over the items of Agroup which account for high percentage of

costs.

Less stringent ctrl is adequate for category B.

Very little ctrl would be sufficient for CategoryC.


27/32


Criteria A type B type C Type

Quantity 10% 20% 70%

Annual Usage 75% 15% 10%

Control Verystrict

Moderate Less

Ordering Daily/weekly

Monthly Yearly

Safety stock Less Moderate High


28/32


POLICIES FOR ~A GROUP ITEMSPOLICIES FOR ~A GROUP ITEMS They should be ordered more frequently to

reduce capital lock up at a time in inventoriesas 15 percent of items cost 65 percent of totalvalue.

The purchasing department should Make themaximum efforts to expedite and delivery ofthese items are to be stored as few in number aspossible.

The purchase of these items should be with topofficials to ensure prompt services from thesupplier.

The stock report of A items should be sentmore frequently, say at least once in 15 days.


29/32


POLICIES FOR ~B GROUP ITEMSPOLICIES FOR ~B GROUP ITEMS

These account for 20 percent of total quantityand 20percent of the total value.

Order quantities, re-order stocks and safetystock should be fixed and revised for B items

at least one in every 4 to 6 months.

B items should be ordered less frequently than

A items


30/32


POLICIES FOR ~C GROUP ITEMSPOLICIES FOR ~C GROUP ITEMS

C group of items account for 65 percent ofquantity and hardly 15 percent of value.

Large quantities can be brought at a time, astotal investment will be least.

Paper work can be reduced considerably if

orders are placed once or twice a year.

The source of supply can be one or two based on

their reliability.


31/32



32/32


THANK YOUTHANK YOU

final komal inventory

Documents