Inventory Management in Businesses
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Inventory Management in Businesses
Introduction
The high rise in population in the world has made people more innovative. As a result, they have come up with several manufacturing and service industries to meet peoples' daily needs. Carrefour is an example of a service industry while Apple a manufacturing industry. Carrefour is based in France. It is involved with managing and operating supermarkets, cash and carry stores, hypermarkets, convenience stores, and food and non-food e-commerce sites. It collects user goods; nonfood and food goods, fabrics, electronics, home appliances, and local products. Carrefour makes a total revenue of $81.1 billion, Net Income of $1.7 billion, a market capacity of $12.9 billion.
Apple is a manufacturing technology company that designs, advances, and trades computer software, electronics, and online services. Apple became public in 1980, and since then, it has been shipping new computers that contain advanced graphical user interfaces (Musacchi and Serra, 2018). Apple's annual revenue approximately sums to $274.5 billion. Apple is the 4th largest PC and smartphone manufacturer in the world. By August 2018, it grew into the first openly operated business in the U.S. Apple hires 147,000 permanent workers. It maintains roughly 511 merchandising stores in 25 countries and runs the iTunes Store (Musacchi and Serra, 2018). It has a high degree of brand value and trustworthiness.
Both Apple and Carrefour use different types of inventories essential for the management and success of the companies.
Company inventory
Inventory is typically the store or stock of goods (Singh and Verma, 2018). Proper inventory enables businesses to know the total number of services and products they have at hand. Inventories help sustain enterprises to run as usual and keep a supply of finished goods to meet their demand. According to Singh and Verma (2018), both Carrefour and Apple use various types of inventory in planning, managing, and budgeting, which enables them to thrive in the market. The inventories include;
1) Raw Materials inventory.
Raw materials are essential in any business. They are the input materials a business needs to produce goods. Carrefour uses various raw materials, food, nonfood, textile, and electronics, while Apple uses electronics and computers.
2) Finished goods inventory
This inventory helps the management to know any finished goods or products present in the manufacturer’s stock.
3) Transit inventory
They are the type of inventories that businesses use in the transportation of materials to different locations. Inventory must be recorded to ensure the continuous flow of supply and demand, together with the timeframe for those demands to be met.
4) Buffer inventory:
Inventory is kept at hand as safety stock to evade inventory sellouts in instances of long reordering occasions.
5) Cycle inventory:
Cycle inventory is an outcome of economic order quantity theory (EOQ). Goods ordered that are more than you presently want. Carrefour and Apple typically order excess goods with cycle inventory to achieve the cost-saving procedures stated by using an EOQ formula.
6) Maintenance, repair, and operating inventory:
It is an inventory that is not either traded or consumed but is vital for operations of business operations.
7) Theoretical inventory:
It states the number of inventories a business has to have.
Goods and Services Design Concept
Good design gives a better sense to a business in that it explains the customer's needs into the shape and form of the product or service. It, in the long run, enhances profitability. Goods and services design starts from the generation of the concept (Musacchi and Serra, 2018). An idea for a good or service is transformed into a picture capturing the products or services' nature and providing overall design specifications. There is also concept screening which comprises investigating its feasibility, satisfactoriness, and weakness, broadly ensuring that a product or the addition of a service to the company is serviceable. Primary design requires documentation of key parts of the product or service and how the parts are suitable together. Tools that Apple and Carrefour companies use during this stage are flow charts and constituent structures. Evaluation and upgrading of a design require re-examination to identify whether the design can be done in a way that is better, easy, and cheaper (Singh and Verma, 2018). Procedures these businesses use here include value engineering and quality function deployment. Prototyping and the final design contain the ultimate details that permit the product or service to be formed.
Inventory and Role in Performance
Inventory's major role in any company is to facilitate the balancing of supply and demand (Paa...