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Home Depot and Inventory management.

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For this project, examine how Home Depot manages its inventory and then write a paper. APA Style, references, citation answer the following questions.

Q1. Describe the ways in which Home Depot manages its inventory.

Q2. How does the Home Depot's approach to inventory management impact on the efficiency of its supply chain, either positively or negatively?

Q3. How might Home Depot improve the management of its inventory?

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Inventory control is important because it affects cash flow and productivity within an organization. Every time an item is purchased it takes time and money to engage in the negotiation process/cut a purchase order, receive, stock, and process paperwork. Retailers that are successful have fine-tuned this process so that they are able to buy at the best price, with the most efficiency, and equally important, to only buy what they need when they need it. Every product that is sitting on a retailer's shelf not selling is costing the company money. Bernie Marcus and Arthur Blank (founders of Home Depot) struggled with inventory problems from the very beginning, having the desire and vision to open more stores but lacking the money to stock the stores. (The Home Depot, Built from Scratch How a Couple of Regular Guys Grew the Home Depot from Nothing to $30 Billion. Bernie Marcus and Arthur Blank with Bob Andelman, Times Business 1999.) As the company developed it used the stores enormous trading volume to get the best prices. Home Depot's major competitor is Lowes, which uses a successful inventory management system called Rapid Response Replenishment (R3) to maximize just in time ordering. (http://stockherd.com/mic/?p=5).

When Home Depot was originally set up, individual store managers could order directly for their stores. This allowed managers to buy what the community needed (storm supplies for instance) but did not take advantage of bracket pricing, nor did it focus on inventory ...

Solution Summary

This VERY detailed solution outlines how Home Depot manages its' inventory, the effect this approach has on the company's overall efficiency, and gives ideas as to improving the management of inventory. It includes multiple links and examples.

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See Also This Related BrainMass Solution

Home Depot Supply Chain Management

Research the Home Depot with information you can find on the internet or the resources you find on your own. The paper should be 3-4 pages in length and have a cover sheet and a reference page. Clarity of presentation is important, as well as your ability to apply the topics to the logistics area of your selected firm. Use at least 3 different sources of information and annotate your sources of information appropriately on your references page and within the text as necessary. You will be assessed on how well you demonstrate your knowledge of the topic as it applies to your selected firm. Submit your assignment for grading by the end of this module.
Provide at least three references for each part.

PART I (3-4 pg) Inventory Management
Name Of Organization (HOME DEPOT)
Home Depot Primary Business
Why You Choose Business
Home Depot Inventory Management Procedures
Does This Home Depot Use VMI
Could Home Depot Use VMI
What Does Home Depot Use To ensure It Has The Right Inventory At The Right Time And Control The Cost

Part II (3-4 pg) Quality Management
Does your selected organization use quality management procedures in its logistics system?
In what ways does Home Depot use quality management procedures in its logistics system (as you are to give some specific examples)?
If Home Depot does not use quality management procedures, what steps would you suggest they put in place in order to improve its logistics system?

Part III (3-4 pg) Logistics Planning
Does Home Depot maximize its logistics efficiency through facility location planning?
If so, in what ways, using examples?
If not, could facility planning improve matters?

Part IV (3-4 pg) Facilities Layout
Are Home Depot's facilities designed for logistics efficiency?
If so, how, and what are the effects?
If not, how might they be improved?

Part V (3-4pg) Process Improvement
How can the logistics processes be improved in Home Depot?
What, if anything, have you learned in this course that might help that improvement effort?

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