Competitiveness and Inventory Management

Competitiveness and Inventory Management

Assignment 1: Discussion—Competitiveness and Inventory Management

To be competitive, many fast-food chains expanded their menus to include a wider range of foods. Although contributing to competitiveness, this has added to the complexity of operations, including inventory management. In what ways did the expansion of menu offerings create a problem for inventory management? One form of inventory is safety stock, which is primarily carried by companies to ensure a variety of products is available at all times. However, safety stock ties up capital and hinders cash flow.

• As a manager, what recommendations could you provide to reduce inventories as it relates to safety stock?
• What parameters would lead you to believe that (a) large safety stock, (b) small safety stock, and (c) zero safety stock would be advantageous for the organization? Be sure to provide examples and data in support.

After your initial post, discuss the following:

• What are some of the ways in which a company can reduce the need for inventories?
• How has technology aided inventory management?
• How have technological improvements in products such as automobiles and computers impacted inventory decisions?

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