Facilitator:
Inventory management plays a focal point in the management and running of the businesses. In some cases, under stocking and overstocking occur depending on the factors characterizing the business’s activities. Cost accounting in the business helps to maximize the benefits to standardize the returns (Varila, Seppänen & Suomala, 2007). The paper evaluates the cost factor of a fashion supplier and how technology can make the cost functions better.
The optimal level of product availability in the firm is determined by several factors. Firstly, Wallin, Rungtusanatham & Rabinovich (2006) asserts that the storage capacity of the firm plays a major role in ensuring the availability, which fosters continuous supply. For example, a firm that have a small stock can hardly supply its products sufficiently (Mentzer, Myers & Stank, 2007). For our business, the storage capacity needs ample space because the firms supplied from our centre have expanded extensively in consumer base due to the quality we maintain. Technology also affects the optimal capacity of fashion clothes. In order to make orders effectively, the latest methods of stocktaking and inventory control should be adopted. According to Vitasek (2007), businesses must have good levels of technology that matches the market demands. The capital base of the business also plays a vital role in the optimal stock levels in the firm. This means that the lower the capital base that our firm generates, the lower the investment into fashion clothes stock.
Technology can help in the efficiency of the business in many ways. Pokharel (2005) observes that through facilitating good communication with the consumers, technology provides a strategic approach of avoiding overstocking that may result to inconsistencies in the market. Through electronic ordering, technology helps to keep the inventory levels at manageable states. Technology also facilitates easier transportation of the inventories to the consumer firs thus avoid overstocking and delays (Vitasek, 2007).
The main challenges when assigning specific costs in a warehouse revolve around the stock turnover (Wallin, Rungtusanatham & Rabinovich, 2006). This is because the owner of the warehouse can hardly determine the stock levels over a period due fluctuations in demand and supply patterns. However, through the electronic stocktaking, the management can keep desirable stock levels and facilitate specific cost allocation.
References
Mentzer, J., Myers, M. B., & Stank, T. P. (2007). Global Supply Chain Management. Thousand Oaks: Sage.
Pokharel, S. (2005). Perception on information and communication technology perspectives in logistics: A study of transportation and warehouses sectors in Singapore. Journal of Enterprise Information Management, 18(1/2). Retrieved from ABI/INFORM Global database.
Varila, M., Seppänen, M., & Suomala, P. (2007). Detailed cost modelling: A case study in warehouse logistics. International Journal of Physical Distribution & Logistics Management, 37(3). Retrieved from ABI/INFORM Global database.
Vitasek, K. (2007). Inside storage and inventory control. Multichannel Merchant, 24(10), 60. Retrieved from http://search.proquest.com/docview/195855270?accountid=45049
Wallin, C., Rungtusanatham, M. J., & Rabinovich, E. (2006). What is the "right" inventory management approach for a purchased item? International Journal of Operations & Production Management, 26(1/2). Retrieved from ABI/INFORM Global database.
