Wal-Mart US is a retail chain store in the United States. It is among the most successful retail chain stores in the whole world. Wal-Mart is famed for having one of the most efficient and well-organized inventory system. It manages is inventory using numerous inventory management systems and incorporate fixed order quantity in their stock management systems. The main inventory system used by the retail chain store is the modern inventory systems which employ the use of bar codes, as well as radio frequency identification . These modern inventory management systems control ensure that there is minimal stock outs. They also monitor the safety stock levels and warn the managers on when to re-order.
The company also uses fixed order quantity method to prevent the overfilling of its stores. This ensures the firm has minimal carrying costs; orders quantity issues are sorted as well as always maintaining the economic order quantity at all times.
This system of inventory management employed by Wal-Mart has its own shortcomings. For example, if a commodity becomes a big seller or its sales shoots up the scale, the supplier might not be ready to supply the order amount that the retail chain takes. In another example, the machines are made by humans, which are prone to make mistakes. Therefore, in the occurrence of a power failure of software corruption, the entire inventory system will be down and tracing of sales becomes an issue . Likewise, if the radio frequency identification collides, it may end up reflecting the wrong details.
Nevertheless, the modern inventory system that Wal-Mart US uses while incorporating the fixed order quantity system, in my opinion, is an effective system for its operations. Despite the shortcomings, these methods of inventory management are also pillars in the success of the retail chain store .
References
Crosby, T. (2014, April 3). How Inventory Management Systems Work. Retrieved April 3, 2014, from http://money.howstuffworks.com/how-inventory-management-systems-work2.htm: http://money.howstuffworks.com/how-inventory-management-systems-work2.htm
Parker, B. (2013, September 22). Walmart's Inventory Management System. Retrieved April 3, 2014, from http://prezi.com/qefihcomutia/walmarts-inventory-management-system/: http://prezi.com/qefihcomutia/walmarts-inventory-management-system/
