Your assignment is to prepare and submit a paper on inventory management.
The system used by Kroger allows for the shelves to look like they are always full of the same type of products. This allows the products to look readily available at all times. The system works well when the projected amount of sales are accurately made. Allowing for too much or too little inventory will mean for inadequate operating costs. This is also known as order quantity issues. This can mean losing customers or allowing food to expire. Firms like Kroger that use perishable inventory are dependent on an accurate inventory. Order quantity issues can arise from any type of inventory system. .
This system that is used by Kroger is pretty acceptable. The only problem is that because most of the inventory is perishable, inventory accuracy must be perfect so that money is not lost. Proper management, research, and production teams are essential to making sure proper inventory levels are maintained. The development of a new hybrid model can eliminate wasted inventory. Wasted inventory is a common problem for firms such as Kroger.
No matter which inventory system is used, there has to be some sort of control that allows the firm using the system to remain orderly and profitable. Without the chance for steady inventory and profit, the firm will not survive.