Page 176 - DMGT550_RETAIL_MANAGEMENT

Unit 10: Inventory and Product Availability Levels

Shipping and Billing Notes

Two basic functions of inventory control management, once inventory leaves the shelves, are
shipping and billing. Advanced shipping notices notify the customer that an order has shipped
and when the customer can expect the shipment. This enables the customer to plan resources,
like labor and shelf space. The customer must then be invoiced. In automated invoicing, the
control system recognizes a shipment and generates an invoice (usually through email) to the
customer.

Did u know? An inventory control system is a set of hardware and software based tools
that automate the process of tracking inventory.

Self Assessment

Fill in the blanks:
1. .............................. and manufacturing companies keep an inventory of goods held for sale.
2. .............................. is responsible for determining and maintaining the proper level of goods
in inventory.
3. An effective system .............................. inventory material costs, which compares the
theoretical costs with the actual cost of materials.

4. Advanced .............................. notices notify the customer that an order has shipped and
when the customer can expect the shipment.

10.3 Allocating Merchandise to Stores

Store Allocation and replenishment is a complex activity requiring deep insight into distribution
planning and allocation of merchandise to ensure that the right merchandise gets allocated to
the right stores in right quantity at the right time. Optimized allocations result in achieving the
financial targets and profitability goals set by the retail organization from a strategic standpoint.
Poor planning or any deviation from optimized planning will result into lost sales, missed sales
targets and the worst that could happen for any retailer - a dissatisfied customer.
Allocation and Replenishment suite provides an optimized methodology to consistently track
perpetual inventory and to ensure that the optimum stock is allocated to the stores - considering
store fills, forecasted sales across the stores, latest sales trend, seasonality, local demographic
considerations and the assortment plans.
The Allocation engine has multiple allocation algorithms with respect to various Allocation
strategies. Different allocation strategies are in built as part of location engine - which allocates
the stock based on sales performance, store priorities, store clusters as well as several other
business criteria options. The Allocation engine is capable of automated allocation based on
stock level, shelf stock level, or min/max levels. This feature enables the stock planner to work
more effectively on stock allocation and it reduces their work load significantly.

The Allocation engine tightly integrates with the supply chain system - where replenishment
orders are linked to allocation which ensures the stock fulfilment ration remain 100% accurate.
Allocating merchandise to store involves three decisions:

1. How much merchandise to allocate to each store

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