RETAILING April 11, 2018
TODAY S AGENDA Introduction to Unit 5: Inventory Management Hand back marked assignments.
UNIT 5: INVENTORY MANAGEMENT NEW!
INVENTORY MANAGEMENT - INTRODUCTION In our last unit, we looked at how inventory was purchased and documented when it arrives at the store. In this unit, we will be looking at how inventory is managed and kept track of while in the store.
INVENTORY MANAGEMENT A retailer must manage inventory effectively in order to be successful. There must be enough merchandise on hand to meet customer demand, but having too much inventory at one time can also be a risk to the business. So how do retailers keep track of how much inventory is on hand, and how do they know when they need to order more?
INVENTORY MANAGEMENT Prior to technology this would all need to be counted and done by hand. Today, many stores use an automatic replenishment system to avoid out-of-stock situations. This system uses software and the UPC markings on the products to track inventory electronically. An automatic store replenishment system automatically records when stock comes into and out of inventory, and it detects low stock and will trigger the reorder process.
INVENTORY SYSTEMS
INVENTORY SYSTEMS Successful inventory management requires a reliable system. Inventory control systems manage inventory levels to make sure stores have enough merchandise to meet sales goals without having too much inventory on hand. There are two methods of tracking inventory that retailers generally use today: Periodic Inventory Control System Perpetual Inventory Control System
PERIODIC INVENTORY SYSTEMS A periodic inventory system involves manually counting merchandise at regular periods such as weekly, monthly or annually. In some cases this may take a day or two to do and will usually be done throughout the night so that the store does not have to close. By doing this, an accurate number can be obtained by visually inspecting or counting the merchandise on hand. It is a good practice for all businesses to physically count their inventory at least once a year, even when perpetual inventory systems are used.
PERIODIC INVENTORY SYSTEMS CONTINUED A physical inventory count will help expose stock shrinkage. Stock shrinkage is the difference between how much inventory on-hand the computer system shows vs. the actual inventory on hand. Several factors may cause stock shrinkage: employee theft shoplifting vendor fraud administrative error Therefore, it is important to physically count inventory at least once a year to be sure that the actual quantities on hand equal those shown by the computer inventory records.
PERPETUAL INVENTORY SYSTEMS A perpetual inventory system shows the quantity of items on hand at all times. This system tracks all purchases and returns as they happen in real time. This method of tracking can be done either manually or by using software.
MANUAL PERPETUAL INVENTORY SYSTEM Using the manual system, sales are tracked by removing the price tags when products are sold. Price tags show information about the vendor, date of receipt, color, size and style. The tags are organized and the information is manually recorded. Downfall: Using a manual system is very time-consuming and less accurate than the computerized system.
POINT-OF-SALE SOFTWARE (POS) The point-of-sale (POS) system electronically uses scanners to record sales information and to keep track of inventory. It records each sale when it happens by scanning the bar codes on the products. Cash registers are equipped with optical scanner software, such as lasers, to record sales transaction data directly from the Universal Product Codes (UPCs). When merchandise is scanned at the checkout, the cash register sends the UPC 13-digit code to the store's central POS computer to locate the price of the item. It then sends the price back to the cash register.
POINT-OF-SALE SOFTWARE CONTINUED As the item is scanned through the system, the inventory is then automatically subtracted from the current inventory, thereby allowing for accurate, up-to-date inventory counts. This eliminates having to conduct manual inventory counts. Each day a retailer can review sales information sent by the system to monitor items that are selling and those that are not. As well as to monitor how much inventory to order and when to order it.
VIDEO https://www.youtube.com/watch?v=oxm9xjqaurs
HAND BACK MARKED ASSIGNMENTS