Inventory Management Virgin Store Case Study

Question: Write about theInventory Managementfor Virgin Store Case Study. Answer: Inventory Techniques used by Virgin Megastore ABC Analysis It is a common inventory technique used by the company. Virgin Megastore classifies its inventory into three classes. That is A, B and C. Class A comprises of high annual dollar volume products of 70-80%. The products in class A includes raw materials, purchased stock, completed and waiting for shipment, finished products and stock necessary to keep machinery and other processes productive. The Class B includes medium annual dollar volume products of 15- 25%. The products in this category comprise of work in progress and products almost complete. Class C - low annual dollar volume products of 5%. Class C products comprise of maintenance and repair stock. The company categorizes products based on the cost significance and inventory value. Then each category of the inventory is managed differently. According to Aro-Gordon, Gupte, Mysore, 2016,) ABC technique is made more appropriate when used together with Just-In-Time technique. The company ABC analysis schedule is as illustrated be low; A items once a month B items once a quarter C items once every 6 months This the Schedule used by the Company to Carry out Cyclical Counting. How Virgin Megastore Manages its Inventory Virgin Megastore lays emphasis on inventory accuracy. To achieve this, the company has employed accurate recording and cyclical counting of the inventory. Knowing the exact amount of inventory in the store helps the management focus on the needs of the customers (Aro-Gordon , Gupte , Mysore , 2016). Accurate inventory managements ensures the right number of inventory is planned for ordering, scheduling, and shipping. Strategies, Techniques, and Software used for Inventory Management Virgin Megastore uses Micro-strategy business intelligence software that is integrated into the companys JDA MMS merchandising system(Hadfield, 2017). This information system helps the company to plan for the purchase of the products at store level. Again, this system has been very crucial in helping the company increase its sales and minimize the level of capital tied up in the stocks in the store. To ensure consistency of accurate inventory records, the company also carries out cyclical counting. The current inventory total is compared with the accurate records, and the inaccurate are documented. This helps in maintaining the reliable record of the inventory in the store. It also helps managers to adopt to control measures to reduce loss, pilferage, theft and shrinkage. The Epos-Linked Virgin Information System is another strategy that has been used by the company to carry out assortment plans in its stores. This software helps in managing the buyers demands by matching their demands with supplies. References Aro-Gordon , S., Gupte , J., Mysore . (2016). Contemporary Inventory Management Techniques: A Conceptual Investigation. International Conference on Operations Management and Research, 1(1), 1-20. Retrieved from https://www.google.com/url?sa=trct=jq=esrc=ssource=webcd=1cad=rjauact=8ved=0ahUKEwjggdmgq8vTAhXDLcAKHRdsB2kQFggrMAAurl=http%3A%2F%2Fsdmimd.ac.in%2Fpdfs%2FContemporary_Inventory_ICOMAR16.pdfusg=AFQjCNFp3YWKGgHb7YTqDmO_88IYcBNORwsig2=EtMsHyPa9YGJ Hadfield, W. (2017, February 6). Virgin Retail gets stock on the move with BI software. Retrieved from TechTarget: https://www.computerweekly.com/feature/Virgin-Retail-gets-stock-on-the-move-with-BI-software