Given that supply chain decisions rely on accurate inventory balances, demonstra

Question

Given that supply chain decisions rely on accurate inventory balances, demonstrates the ability to maximize and control inventory across the entire supply chain.

Analyze computer asset productivity and customer service related measures of inventory.

Explain the cost of a company's service level policy.

Discuss the advantages and disadvantages of different inventory location strategies.

Determine inventory policy parameters to minimize total acquisition costs in continuous review, preriodic review, and single period models.

Explanation / Answer

Inventory management is an essential task for each and every organisation to stay productive and to efficiently maintain the overall inventory inside their warehouses as well as a storage platforms.

Some methods which can be used to improve the inventory Optimisation are as follows

• Annual stocking policies.

Determining the maximum number of inventory that can be stocked annually and the specific supply they are mandatory to be kept in the warehouse across the spanning structure of the warehousing is very necessary. Setting up the safety stock levels as well as an average inventory level is very beneficial for optimising the inventory system.

• Preparing budget

Proper budget by keeping the inventory requirement in mind should be created. Budget plays an important role in optimising the overall inventory according to the market and organisations need. This specific budgeting system directly increases the overall level of efficiency as well as productivity of the organisation the overall logistic, distribution as well as carrying cost are widely reduced.

• Inventory turnover ratio

Calculating the used inventory and determining if the inventory is used or turned over can be very beneficial for an organisation to maintain an optimised position of the inventory system. This spacific type of inventory management is required to properly fill and drain the inventory management while maintaining your overall efficiency of the system.

• Electronic inventory management system

Applying the electronic inventory management system into the organisation would make a huge difference as electronic management system organises the overall structure of the inventory according to the needs and gives you a bet analysis of the specific position. This specific term is widely used for managing large inventory and efficiently optimising the overall inventory management system.

• Automation

Applying automation in inventory can be very beneficial for an organisation to maintain an advantage over a retrieval as well as during process. Automation provide extremely accurate data and also accurately enhances the overall position of the inventory.

• Demand forecasting

Forecasting the demand of the customers inventory which need to be stored can be defined. This is specific term is also very useful for reducing the overall cost and increasing the cost to place ratio for restoring overall Woods.

• Continuous process improvement

By learning from the previous stock and continuously improving the organisational structure can be very beneficial for an organisation to maintain an optimised position in inventory management. Continuous process improvement also helps an organisation to create a better inventory management system which directly increases the overall efficiency of the system.

Example -

CVS and Walgreens are one of the biggest pharmacy provider in United States of America.

Walgreens have been developing a customer advantage by signing different deals with the brands with which are exclusively available in the wall green. It is using Pharmaceutical benefit managers which directly act as a broker between the company, and the retailers. Is the specific strategy has been very effective and had reduced the overall share of CVS.

This specific practice as increase the level of implementation for wall green and CVS has announced that they will lose 40 million prescriptions because of this is specific practice done by Walgreens. Walgreen has been collaborating with the prime therapeutics and tricare which has proven very effective and has reduced CVS's business.

CVS has its own Pharmaceutical benefit managers which is operating 13 subsidiaries and it also helped the company to successfully fulfill more than 1.03 billion subscriptions for larger than 9000 pharmacies. Where Walgreens stand out for 929 million prescriptions to 13000 pharmacies.

CVS has been creating extremely large Healthcare organisation as an pharmaceutical retailer which have purchased caremark which is the largest pharmaceutical benefit manager for United States of America and integrated this specific pbm in2it supply chain.

This acquisition directly help CVS to reduce their overall expenses and to offer low customer caused by developing a mail in service for prescribing its customers.It helped the company to grow more and more inside the market and to develop 10% of the companies pbm sales as a result of the efficient supply chain. Later this is specific segment outcomes every other segment by the margin of 20%.

As CVS has a vertical supply chain, walmart is now gaining profit from the horizontal supply chain by spreading there network horizontally. Walgreen has been coming in partnership with the Pharmaceutical benefit managers of CVS which has been proven very beneficial for wall green to acquire the CVS market.

Vertical supply chains which are used by CVS are beneficial in internal cause but they are suffering from over dependencies which is not really a good process for offering best prices in the segment. By applying the horizontal operating structure Walgreens have been overcoming and surpassing the overall revenue generated by CVS.

Implementing variety of the inventory and availability of the prescription has been a major advantage for both of the forms, as Walgreens has their contract with three new pbmS, there inventory system has been broadly improved and their overall cover of the stores is larger than CVS.

CVS mail in service is completing directly with the retail service of Walgreens. CVS'S vertical supply chain have been very effective but Walgreens has found way to spread horizontally and to implement new strategies into it supply chain to conquer the dominance of CVS.

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