Related Literature of Sales and Inventory System
Inventory Systems Summary
According to the U.S. Small Business Administration, “Inventory refers to stocks of anything necessary to do business” (U.S. Small Business Administration, 2010, pp 1-2). The U.S. Small Business Administration publication describes what constitutes successful inventory management (balancing cost versus benefits of inventory), including
1) Maintaining a wide assortment without spreading the rapidly moving items too thin,
2) Increasing inventory turnover without sacrificing service,
3) Keeping stock low without sacrificing performance ,
4) Obtaining lower prices by making volume purchases,
5) Maintaining an adequate inventory without an excess of obsolete items.
Anyone in business must understand the business of inventory. Below is a look at six different inventory systems as well as a comparison of the advantages and disadvantages.
Wal-Mart Inventory System
Wal-Mart runs its stores on a perpetual inventory system. This system records the quantity of items sold as items are purchased. The computer system at Wal-Mart constantly keeps up with additions or deductions from inventory and tells management what items are on hand. The organization also conducts counts of employee manual counts of inventory periodically. When an item arrives at the Wal-Mart distribution center it is scanned into the inventory system. When the items are purchased by the consumer, the point-of-sale system reduces the inventory from that purchase. According to Wal-Mart’s Gail Lavielle, a leaner inventory will help clear out store clutter and help Wal-Mart focus on specific brands and products that consumers want (The Associated Press, 2006).
Advantages and Disadvantages of the Wal-Mart Inventory System
The advantages of a perpetual inventory system are that inventory is quickly updated in real-time, which gives a constant picture of the inventory status. With this data, inventory counts will be more accurate and allow one to keep up with demand or
According to the U.S. Small Business Administration, “Inventory refers to stocks of anything necessary to do business” (U.S. Small Business Administration, 2010, pp 1-2). The U.S. Small Business Administration publication describes what constitutes successful inventory management (balancing cost versus benefits of inventory), including
1) Maintaining a wide assortment without spreading the rapidly moving items too thin,
2) Increasing inventory turnover without sacrificing service,
3) Keeping stock low without sacrificing performance ,
4) Obtaining lower prices by making volume purchases,
5) Maintaining an adequate inventory without an excess of obsolete items.
Anyone in business must understand the business of inventory. Below is a look at six different inventory systems as well as a comparison of the advantages and disadvantages.
Wal-Mart Inventory System
Wal-Mart runs its stores on a perpetual inventory system. This system records the quantity of items sold as items are purchased. The computer system at Wal-Mart constantly keeps up with additions or deductions from inventory and tells management what items are on hand. The organization also conducts counts of employee manual counts of inventory periodically. When an item arrives at the Wal-Mart distribution center it is scanned into the inventory system. When the items are purchased by the consumer, the point-of-sale system reduces the inventory from that purchase. According to Wal-Mart’s Gail Lavielle, a leaner inventory will help clear out store clutter and help Wal-Mart focus on specific brands and products that consumers want (The Associated Press, 2006).
Advantages and Disadvantages of the Wal-Mart Inventory System
The advantages of a perpetual inventory system are that inventory is quickly updated in real-time, which gives a constant picture of the inventory status. With this data, inventory counts will be more accurate and allow one to keep up with demand or
References: De Sensi, G., Longo, F., & Mirabelli, G. (2008). Inventory policies analysis under demand patterns and lead times constraints in a real supply chain. International Journal of Production Research, 46(24), 6997-7016. doi:10.1080/00207540701528776. Gentry, C. (2008). A textbook fulfillment case. Chain Store Age, 84(8), 98. Retrieved from MasterFILE Premier database. Kerner, L. (1998). Cracking the college bookstore market. Business Solutions. Retrieved from http://bsminfo.com/article.mvc on November 21, 2010. Mitchell, G. (2005). How one college store has stayed independent. Chronicle of Higher Education, 51(21), B23. Retrieved from MasterFILE Premier database. National Association of College Stores (2010). Higher education retail market facts and figures, September 2010. Retrieved from http://www.nacs.org/research/industrystatistics/higheredfactsfigures.aspx Pfohl, H., Cullmann, O., & Stölzle, W “SIMS implementation takes center stage.” Chain Drug Review 9 Dec. 1991: 52. Academic OneFile. Web. 24 Nov. 2010. “SIMS streamlines operations.” Chain Drug Review 6 Dec. 1993: 48. Academic OneFile. Web. 24 Nov. 2010. Small Business Administration. (2010) Retrieved from http://www.sba.gov/idc/groups/public/documents/sba_homepage/pub_mp22.pdf on 11/20/2010 Stevenson, W The Associated Press (2006). Walmart trims inventory. Retrieved from http://www.msnbc.msn.com/id/12288224 Walgreens accelerates openings