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One of the most important
tasks for the retail organizations in today's scenario is to manage
inventory in an efficient manner. Inventory management in retail is
the process through which a retailer keeps a track over his
inventory. The dictionary defines inventory management as
"Policies, procedures, and techniques employed in maintaining
the optimum number or amount of each inventory item. The
objective of inventory management is to provide uninterrupted
production, sales, and/or customer-service levels at the minimum cost.
Since, for many firms, inventory is the largest item in the current
assets category, not managing the inventory appropriately can and
do contribute to losses or even business failures."
An efficient inventory manage-ment is also very necessary for
proper management of costs. If the inventory levels fall short then it might lead to
a loss of a sale. On the other hand, if more than required inventory
is stocked, the retailer would incur extra costs to store the same.
Inventory management has to be done in an efficient way so that the decisions
on safety inventory and cycle inventory are taken carefully. Therefore,
while managing the inventory, it is very essential for any organization to
take care of the following: |
