Inventory India and to maintain the inventory, a large

Inventory is the most important part of the current assets of
a large majority of companies in India and to maintain the inventory, a large
amount of fund is required by the company. Therefore, managing inventories
efficiently and effectively in order to avoid unnecessary investment is very
important.

WHAT IS INVENTORY?

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Inventory is the entire stock of a
business including:

–         
Raw
materials

–         
Work
in progress

–         
Finished
goods

–         
Tools
and supplies

–         
Goods
in transit

FUNCTIONS OF INVENTORY:

1.      To meet the unexpected customer
demand

2.      To have smooth production requirement

3.      To protect that there will be no
stock outs

4.      To hedge against price increases

Purpose of holding inventory:

Holding inventories means blockage of
funds and the various costs associated with it, but still every business has to
maintain a certain level of inventories to facilitate continuous production and
smooth running of the business.

Three main purpose or motives of
Holding Inventory:

1.      TRANSACTION MOTIVE: Any business maintains inventories to avoid blockage in its production
and sales and by maintaining the business ensures there are no interruption in
production process thereby, sales are not affected.

2.      PRECAUTIONARY MOTIVE: Inventories are also held for sudden and unexpected demand arises for
finished goods. In this case, the business should have some inventories in
their warehouse to protect against the risk of such unpredictable changes.

3.      SPECULATIVE MOTIVE: A business may hold inventory for any future change in the price level
and have extra gain over the inventory in hold.

 

INVENTORY COSTS ARE OF VARIOUS TYPES:

1.      Purchase cost: Cost paid to supplier to buy the inventory.

2.      Holding or carrying cost: Cost relate to physically having
items in storage.

It includes:

a)      Interest

b)      Insurance

c)      Depreciation

d)      Warehousing costs

3.      Ordering costs: Cost of ordering ad receiving inventory.

4.      Shortage costs: When demand exceeds the supply of inventory.

 

WHAT IS INVENTORY MANAGEMENT?

Stock administration is procedure of
following, administrating and organization of requesting, stockpiling and
utilization of materials that an organization utilizes as a part of the
creation of products.

INVENTORY MANAGEMENT OBJECTIVES:

1.      Continuously supply of required
materials.

2.      Minimize the risk of under and over
stocking of material should be minimized.

3.      Maintaining the systematic record of
inventory.

4.      Losses, damages and misappropriation
of materials should be less.

5.      Cost associated with inventory should
be minimized.

 

ABOUT BIG BAZAAR

INDUSTRY

Retailing(Hypermarket)

FOUNDED

2001

HEADQUATERS

Mumbai,
Maharashtra, India

PRODUCTS

Department
store

PROMOTERS

Mr.
Kishore Biyani

REVENUE

Rs.
6000 crores

EMPLOYEES

36000
people

STORE

216(+)
stores, across 90 cities in India.

 

PRODUCTS:

 

 

 

SWOT ANALYSIS OF BIG BAZAAR:

 

 

 

INVENTORY MANAGEMENT AT BIG BAZAAR:

PRODUCT CATEGORIES:

1.      APPARELS: Formals and casuals wear,
fabrics, jeans and shirts etc.

2.      ELECTRONICS: TV, Mobile and
Accessories.

3.      HOME CARE: Soaps, detergents,
cleaning agents.

4.      CHILL STATIONS: Beverages and drinks.

5.      FARM PRODUCTS: Fruits, vegetables,
dairy products.

 

 

TYPES OF INVENTORIES MAINTAINED:

1. CYCLE INVENTORY is conveyed
for the FMCG items and sustenance classification as the turnover of these items
is high and after a period they get terminated.

2. SAFETY LEVEL OF INVENTORY
is kept up for array as the cost is high and they can be held for a more drawn
out timeframe.

3. SEASONAL LEVEL OF INVENTORY
is received for the items which are sought after for just pinnacle season.

 HOW INVENTORIES ARE MAINTAINED:

The store director checks the stocks
time to time and furthermore the requests of the clients. Director keeps up
stock-in and stock-out, with the goal that he can choose the level of stock.
The supervisor keeps a beware of the varieties in the necessity of inventories
eg., array are requested around following 45 days and for each example they
have move down of 10 pieces.However, if there is a requirement of more pieces,
they first ask other stores of Big Bazaar and if they fail to meet the demand,
they go for “Transfer of Interest”.

 

REORDER POINTS OF INVENTORIES:

As such there are no reorder points. Requests
are put as and when required with the exception of in a couple of things:

·        
Apparels:
requested once their stock fell underneath 4 for every piece.

·        
General
stock: Includes nourishment and non-sustenance things, it is 7 days.

·        
Vegetables:
gone up against regular routine from nearby merchant.

 

INVENTORY MANAGEMENT OF PERISHABLE GOODS:

Perishable merchandise like vegetables
are kept up with care. Vegetables are purchased on regular routine based on
request, and occasional thing. It is additionally found out that harmed
vegetables are sold requiring little to no effort to some different channels.

STOCK MANAGEMENT OF IMPERISHABLE GOODS:

Perpetual merchandise like utensils
and staple products and electronic things are brought from their particular
conveyance channels. From that point products are provided to each Big Bazaar
Store. The methods of transportation which are utilized as a part of inventory
network process are Truck and Rails, yet in the event of crisis, flights are
additionally being utilized.

NATURE OF FOOD-ITEMS:

There are better places to keep the
sustenance things both in stock and at store. Things are required to kept at
frosty spots, similar to cool beverages, drain items, organic products and so
on are kept in fridges and those which can be kept anyplace, are kept in
appropriate racks.

 

CONCLUSION:

Inventory management is a vital
function that helps and ensures the success of Big Bazaar. Successful
implementation of inventory will improve the entire business significantly. The
goal of good inventory management is not perfection but improvement. These
improvements should be of permanent basis not be viewed as a short term effort.
The ROI of stock administration will be found in the types of expanded income
and benefits, and a general increment in consumer loyalty.