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Local Retailer Inventory Analysis

Consider a local retailer and analyze its inventory policy (as best you can).

Make some determination of the retailer's policy on inventory levels, stock-outs, backorders, and safety stock.

Provide reasons why you chose those policies for that particular retailer.

Solution Preview

The local retailer I have chosen is our corner grocery store. They manage their inventory based on the type of product, and the supplier. A wholesale distributor that delivers once a week supplies most of the store. For these items, inventory is calculated by a computerized system. Monthly inventories are taken to verify stock on hand. Any discrepancies between what should be on hand and what is counted are adjusted. Occasionally there might be a discrepancy of a couple hundred cans of corn, for instance. In these cases the employees research the item. Perhaps an end aisle display was not counted or there was an error in receiving the delivery. The stock on hand is then considered, less the items sold since the last inventory (based on scan data from the front end) plus any deliveries. The build to level is then calculated. Build to levels are based on the number of days between delivery, and the number of days for safety stock. The grocery store usually uses two ...

Solution Summary

This solution considers a local retailer and analyzes its' inventory policy based on inventory levels, stock outs, back orders, and safety stock. It includes a link and examples.