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  • Principles of Inventory Applied

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    AlexGarcia
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    Inventory management is important for Dollar General to reduce costs by decreasing inventory levels in distribution centers, avoiding storage and obsolescence costs while maintaining sales. While technologies like satellites can help large companies like Walmart decrease inventory, they may not be cost-effective for smaller companies. The inventory manager should find the balance between carrying inventory and in-stock rates, as minimizing inventory does not always minimize total costs due to increased transportation fees.

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    This document is a personal opinion about the importance of Inventory Managemnet in a retail store

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    Inventory management is important for Dollar General to reduce costs by decreasing inventory levels in distribution centers, avoiding storage and obsolescence costs while maintaining sales. While technologies like satellites can help large companies like Walmart decrease inventory, they may not be cost-effective for smaller companies. The inventory manager should find the balance between carrying inventory and in-stock rates, as minimizing inventory does not always minimize total costs due to increased transportation fees.

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    17 views1 page

    Principles of Inventory Applied

    Uploaded by

    AlexGarcia
    Inventory management is important for Dollar General to reduce costs by decreasing inventory levels in distribution centers, avoiding storage and obsolescence costs while maintaining sales. While technologies like satellites can help large companies like Walmart decrease inventory, they may not be cost-effective for smaller companies. The inventory manager should find the balance between carrying inventory and in-stock rates, as minimizing inventory does not always minimize total costs due to increased transportation fees.

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    Inventory Management

    Homework 1
    Dollar General Discussion Questions

    1. Why is inventory management an important issue at Dollar General?

    Because making some changes in its inventory management, the company achieved a very
    important reduction in the inventory held in the distribution centers. Reducing inventory levels
    the company can avoid to conceal other problems, also reduces the storage cost and the
    likelihood of product obsolescence. All of these reduction in cost don’t affect the sales level if
    the inventory management is applied correctly.

    2. Would you recommend that more companies use similar technologies for inventory
    management? Why or why not?
    It depends on the company size. It is recommended for big companies like Walmart to use
    similar technologies because they can get similar results decreasing their inventory levels. On
    the other hand, for little companies the use of these technologies (satellite communication)
    would represent a bigger expense that the savings expected.
    Not always the technology is the solution.

    3. Generally, what other recommendations would you make for Dollar General’s Inventory
    Manager?
    I would recommend trying to find the optimal point between the carrying inventory and the in
    stock rate because the solution isn’t always to minimize the carrying inventory, because less
    inventory can be reflected in higher transportation costs.

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