Question

provide detailed answers

2. Identify and describe in detail the main requirements for effective inventory management? (25 Points) 3. What are the main approaches that used by organizations to keep track of inventory? Clearly explain in detail each of these approaches. Support you answer by identifying some of the technologies that may be used for each approach (20 + 5 Points)

Answer 1

The requirement for effective inventory management:

1. Prioritize inventory.

Classifying inventory into priority groups may help one understand which items one needs to order more frequently, and which are related to the business but can cost more. Experts mainly suggest segregating the inventory into A, B, and C groups. For instance, Items in A group are higher-ticket items that one needs fewer of. Items in the C group are lower-cost items that turn over quickly. The B category is what's in between items that are reasonably priced and move out the door more gently than C items but more quickly than A.

2. Track all product information.

one must make sure to keep records of the product information for things in the inventory. such information must include SKUs, barcode data, suppliers, countries of origin and lot numbers, etc. One might also consider tracking the cost of items over time to be aware of factors that can change the cost, like scarcity and seasonality.

3. Audit inventory.

Many businesses do a complete count once a year of the inventory held and required. Others do monthly, weekly, or even daily checks of their hottest products. Several do all of the above. Despite how often one does it, make it a point to physically count the inventory regularly to make sure it matches up with what one thinks they have.

4. Analyze supplier performance.

An unreliable supplier may cause problems for the inventory requirements. If an individual has a supplier who is usually late with deliveries or frequently shorts an order, it is considered inappropriate. In this case, the company must discuss the issues with the supplier and find out what the problem is. One must be prepared to switch partners and deal with uncertain stock levels and the possibility of running out of inventory.