Essay Example on Inventory is the most important part of companies in India









Inventory is the most important part of the current assets of a large majority of companies in India and to maintain the inventory a large amount of fund is required by the company Therefore managing inventories efficiently and effectively in order to avoid unnecessary investment is very important WHAT IS INVENTORY Inventory is the entire stock of a business including Raw materials Work in progress Finished goods Tools and supplies Goods in transit FUNCTIONS OF INVENTORY 1 To meet the unexpected customer demand 2 To have smooth production requirement 3 To protect that there will be no stock outs 4 To hedge against price increases Purpose of holding inventory Holding inventories means blockage of funds and the various costs associated with it but still every business has to maintain a certain level of inventories to facilitate continuous production and smooth running of the business Three main purpose or motives of Holding Inventory 1 TRANSACTION MOTIVE Any business maintains inventories to avoid blockage in its production and sales and by maintaining the business ensures there are no interruption in production process thereby sales are not affected 2 PRECAUTIONARY MOTIVE Inventories are also held for sudden and unexpected demand arises for finished goods In this case the business should have some inventories in their warehouse to protect against the risk of such unpredictable changes 3 SPECULATIVE MOTIVE A business may hold inventory for any future change in the price level and have extra gain over the inventory in hold INVENTORY COSTS ARE OF VARIOUS TYPES 1 Purchase cost Cost paid to supplier to buy the inventory 2 Holding or carrying cost Cost relate to physically having items in storage It includes a Interest b Insurance c Depreciation d Warehousing costs 3 Ordering costs 

Cost of ordering ad receiving inventory 4 Shortage costs When demand exceeds the supply of inventory WHAT IS INVENTORY MANAGEMENT Stock administration is procedure of following administrating and organization of requesting stockpiling and utilization of materials that an organization utilizes as a part of the creation of products INVENTORY MANAGEMENT OBJECTIVES 1 Continuously supply of required materials 2 Minimize the risk of under and over stocking of material should be minimized 3 Maintaining the systematic record of inventory 4 Losses damages and misappropriation of materials should be less 5 Cost associated with inventory should be minimized ABOUT BIG BAZAAR INDUSTRY Retailing Hypermarket FOUNDED 2001 HEADQUATERS Mumbai Maharashtra India PRODUCTS Department store PROMOTERS Mr Kishore Biyani REVENUE Rs 6000 crores EMPLOYEES 36000 people STORE 216 stores across 90 cities in India PRODUCTS SWOT ANALYSIS OF BIG BAZAAR INVENTORY MANAGEMENT AT BIG BAZAAR PRODUCT CATEGORIES 1 APPARELS Formals and casuals wear fabrics jeans and shirts etc 2 ELECTRONICS TV Mobile and Accessories 3 HOME CARE Soaps detergents cleaning agents 4 CHILL STATIONS Beverages and drinks 5 FARM PRODUCTS Fruits vegetables dairy products TYPES OF INVENTORIES MAINTAINED 1 CYCLE INVENTORY is conveyed for the FMCG items and sustenance classification as the turnover of these items is high and after a period they get terminated 2 SAFETY LEVEL OF INVENTORY is kept up for array as the cost is high and they can be held for a more drawn out timeframe 3 SEASONAL LEVEL OF INVENTORY is received for the items which are sought after for just pinnacle season HOW INVENTORIES ARE MAINTAINED 

The store director checks the stocks time to time and furthermore the requests of the clients Director keeps up stock in and stock out with the goal that he can choose the level of stock The supervisor keeps a beware of the varieties in the necessity of inventories eg array are requested around following 45 days and for each example they have move down of 10 pieces However if there is a requirement of more pieces they first ask other stores of Big Bazaar and if they fail to meet the demand they go for Transfer of Interest REORDER POINTS OF INVENTORIES As such there are no reorder points Requests are put as and when required with the exception of in a couple of things Apparels requested once their stock fell underneath 4 for every piece General stock Includes nourishment and non sustenance things it is 7 days Vegetables gone up against regular routine from nearby merchant INVENTORY MANAGEMENT OF PERISHABLE GOODS Perishable merchandise like vegetables are kept up with care Vegetables are purchased on regular routine based on request and occasional thing It is additionally found out that harmed vegetables are sold requiring little to no effort to some different channels

STOCK MANAGEMENT OF IMPERISHABLE GOODS Perpetual merchandise like utensils and staple products and electronic things are brought from their particular conveyance channels From that point products are provided to each Big Bazaar Store The methods of transportation which are utilized as a part of inventory network process are Truck and Rails yet in the event of crisis flights are additionally being utilized NATURE OF FOOD ITEMS There are better places to keep the sustenance things both in stock and at store Things are required to kept at frosty spots similar to cool beverages drain items organic products and so on are kept in fridges and those which can be kept anyplace are kept in appropriate racks CONCLUSION Inventory management is a vital function that helps and ensures the success of Big Bazaar Successful implementation of inventory will improve the entire business significantly The goal of good inventory management is not perfection but improvement These improvements should be of permanent basis not be viewed as a short term effort The ROI of stock administration will be found in the types of expanded income and benefits and a general increment in consumer loyalty

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