JNB539 | Inventory Management | The Method Of Inventory Control

d on the inventory maintaining methods of retailers. This group of methods suffers from the limitation that every retailer maintains stock of goods levels and different rates of placing recorders. The models which are formulated on target optimal lead time and inventory levels suffer from the shortcomings due to the fact that some organisations follow variable lead times while others follow fixed lead times (Center, Alliance and Insurance 2016). The models which are based mathematical algorithms are rendered ineffective due to variance of supply chains followed by different organisations. Methods of managing inventory to secure cost efficiency suffer from the defect of difference in firms to maintain replenishment rates. The models which seek to maximise profits based on preferences of environment friendly customers suffer from the shortcomings of limited number of firms and customers considering the environmental sustainability important. Thus, it can be  mentioned in this respect that though environmental consciousness is rising among customers, that the population of this environmental friendly customers is effective enough to be considered as a base of a model (Pan, Shachat and Wei 2018). The model for food and nutrition services inventory management is sans flaws since targeting a supply chain with closed loops can be efficient.

Originality of Methodologies:

The originality of the methodology used to gain information about inventory management in different organisations shows that since the method of inventory control prevailing in industries vary according to several factors like the type of industry and business the firms involve in. Hence, no one method is appropriate for inventory management and it depends from one firm to another even within similar industries.

Conclusion:

It can be concluded that inventory management plays a very significant role in the supply chains management and productivity of companies. The maintaining of inventory have profound impact on the business efficiency of the organisations and their overall business management. This is because if organisations maintain immense amount of inventory, it impacts their liquidity negative since a large amount of money goes towards acquisition of the stock of raw materials. Similarly, retail businesses which sell finished goods also stress on selling their stock of finished goods because this releases the cash locked in the inventory. Similarly, firms inventory is intricately related to supply chain management. This is because a smooth inventory management enabled companies to manage their supply chains effectively. Moreover, by using inventories of raw materials and selling the inventories of raw materials, the firms are able to release to the m,oney locked in the inventory and the cost of warehousing them. The money released due to process and sell of inventory can be reinvested in the business operations. Thus, inventory management plays a significant role in the operations of firms.

References:

Feng, M., Li, C., McVay, S.E. and Skaife, H., 2014. Does ineffective internal control over financial reporting affect a firm's operations? Evidence from firms' inventory management. The Accounting Review, 90(2), pp.529-557.

Center, P., Alliance, A.M.A. and Insurance, A.M.A., 2016. Practice Management. Safety.

Pan, J., Shachat, J. and Wei, S., 2018. Cognitive stress and learning Economic Order Quantity (EOQ) inventory management: An experimental investigation.

Bahrom, M.Z., Roslin, E.N., Razak, S.N.A. and Rahman, M.A.A., 2015. A Conceptual Model of Inventory Management System using an EOQ Technique–A Case Study in Automotive Service Industry.

Kazemi, N., Shekarian, E., Cárdenas-Barrón, L.E. and Olugu, E.U., 2015. Incorporating human learning into a fuzzy EOQ inventory model with backorders. Computers & Industrial Engineering, 87, pp.540-542.