Inventory Management
Uploaded by CaseyP on Aug 05, 2018
Inventory Management
An Inventory is an organized list that contains all the tangible and intangible properties of a company. Materials, work in progress or assets meant to enhance the operations of the firm can make up the inventory. Correct valuation of a company’s assets is very important in making crucial managerial decisions. The paper discusses inventory management based on methods used by Apple and Nordstrom companies.
Types of Inventories and their Characteristics
Companies can manage four types of inventories. These include Work in Process, Finished goods, Maintenance, Repair and Operating Supplies (MRO) and Raw material inventory (Nemtajela & Mbohwa, 2017). Nordstrom company is distinguished because of the way it handles its finished goods that are ready for the customer. The type of inventory dealing with manufactured goods and services is called the Finished Goods inventory. A characteristic of this is keeping a record of goods that are ready for the consumers. Apple deals mainly with its supply chain inventory. An important feature of this type of inventory is that it is responsible for the supply a company receives as raw materials to the final products ready for consumers.
Goods and Services Design Concept Integration
The Nordstrom integrates several concepts in the design of its goods and services. The company carries out market research to determine the goods and services needed by customers and the general quantities required. The company thus ensures that enough goods and services are produced without shortage or excessive production, which increases production costs.
The Apple Company mainly controls its supply chain. The firm reduces the number of suppliers. Only very effective suppliers, both by cost and quality supplies obtain tenders. Quality raw materials are thus supplied at competitive prices. In the end, the company will be able to produce very quality products at fair prices.
Role of Inventories in the Companies
Good inventory management will ensure that a firm has enough stock to cater for the needs of the customers while not producing too much as to increase costs. The inventory may include common databases with suppliers to enable them quickly recognize the organizations' needs and make supplies at the right time. Inventory management incorporates methods that ensure there are very high turnovers. Goods and services in such cases are bought while still at very high market values creating room for new production. Inventories can promote mass productions in an organization. They enable timely orders and sales, therefore, providing capital to...