Mbo2

In: Business and Management

Submitted By leehengguan
Words 2046
Pages 9
1.0 Introduction
Pollick (2015) mention that the amount of inventory of products and material contained in a store or factory at any given time. Store owners have to understand the precise number of goods on the shelves and storage areas in order to place an order or loss of control. Industrial unit managers have to to understand how much product’s units for buyer orders. Restaurants have to order extra food depend on their recent supply and the demand of the menu. All of these operations depend on the stock count to give a respond. The word "inventory" means the amount of goods and calculation of their performance. A lot company takes regular supply of inventory to avoid running out. Others take inventory, to make sure that the number of items ordered items to match the actual number counting. Shortage or excess inventory that theft (referred to as the "contract" retail circle) or inaccurate accounting practice.

1.1 Advantage and Disadvantage of hold inventory
First advantage is improving customer service. By hold inventory can increase investment in inventory may result in a higher level of customer service and able to meet and anticipate customer demand. It also prompts and precise customer order upon request.
Second advantage of hold inventory is economies of scale. Take advantage of per unit price reduction for purchasing in large quantity and enjoy economies of production as greater plant capacity and lower per unit manufacturing costs.
The following is disadvantage of inventory such as consume space, higher order and carrying costs, tax depending on demand and market pattern, difficult to predict.

1.2 Push inventory strategy
Push system involves predicting inventory requirements, to reach customer demand. Company has to forecast what goods clients will buy along with will determine the quantity of goods to buy. The manufacturing will produce enough…...

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