Inventory Management and Control

Abstract

The sales plan drives the stock, or inventory, requirement to achieve the required level of sales. However, retailers can achieve this objective by adopting a number of different approaches to the amount of stock needed at any specific time. Large inventories would enable them to minimise lost sales, to manage their stock easily with lower levels of management intervention, but will be very costly. Low inventories, on the other hand, require detailed stock management and ordering systems, and efficient supply chains that are more costly in terms of management time and skills. However, the stockholding costs (Table 12.1) will be considerably lower, and it is towards this position that retailers aspire.