What are the factors affecting buffer stock planning?
Lead time is the period it will take for company to produce a quantity of stock. For planning buffer stock, it has to be in sync with the lead time else either stocking would be delayed or it would be earlier than expected. 4. Product perishability Shelf lives or perishability of the goods is a very important parameter for buffer stock planning.
What is buffer stock and when should it be held?
Safety stock is generally held when there is uncertainty in the demand level or lead time for the product. The amount of buffer stock a business chooses to maintain regularly can dramatically affect their operations. Too much stock can result in high inventory carrying costs.
What happens if you have too much buffer stock?
Too much buffer stock can result in high inventory carrying costs. Too less stock can cause repeated occurrences of stock-outs. Hence, businesses need to maintain a fine balance and decide on the amount of buffer inventory to be held.
Why is buffer stock important in inventory management?
It is an important aspect in inventory management. Buffer stock may be found at all stages of the supply chain, and is intended to reduce the occurrence or severity of stock-out situations and thus provide better line continuity and/ or customer service.
Which of the following is an example of staple merchandise?
Staple merchandise consists of the items that are regularly purchased, displayed and sold by the retailers. For a grocery store, staple merchandise will be bread, butter, milk, salt, eggs, tissues and so on. Similarly, most of the merchandise at sports store and home improvement centers are staple.
What are the factors that determine the level of required backup stock quizlet?
product availability the retailer wants to provide. the greater fluctuation in demand, the more backup stock is needed. backup stock needed is affected by the lead time from the vendor. fluctuations in lead time affect the amount of backup stock needed.More items...
Why can a vendor in a better position to manage a category than a smaller retailer?
Why can a vendor in a better position to manage a category than a smaller retailer? Vendors have superior information through their focus on a specific category and acquire insights from working with different retailers.
Is the smallest unit available for inventory control?
As part of a system for inventory control, the SKU represents the smallest unit of a product that can be sold from inventory, purchased, or added to inventory.
Which of the following is typically the last step in developing a retail communication program?
Which of the following is typically the last step in developing a retail communication program? Implement and evaluate programs.
Which of the following statements is a method for improving net profit margin?
Which of the following statements is a method for improving net profit margin? It can be improved by increasing the gross margin and lowering expenses. _____ is the sharing of forecasts and related business information between retailers and vendors to improve supply chain efficiency and product replenishment.
What are the factors that will improve the relationship between retailers and their suppliers?
There are a number of main factors determining relationships between suppliers and modern retailers to be integrated. They are commitment, conflict, conflict resolution, cooperation, trust (Maloni and Benton, 1999).
Which inventory planning method maintains stock levels in a specific relationship to sales?
The most often used method for inventory planning is the Stock-to-Sales Ratio method.
Which of the following strategies is designed to place products in as many outlets as possible?
An intensive distribution strategy involves selling a product in as many outlets as possible. Selective distribution involves selling a product at select outlets in specific locations. Exclusive distribution involves selling a product through one or very few outlets.
What is unit stock control?
Manufacturers as well as service operators and retailers can use a unit stock control system. This type of stock control is called unit stock control because it shows the number of units or articles which are in stock. Under this system you have a card for each of the different types of stock.
What is the combination of all products made available in a store and set of products offered within a product category?
Product mix, also known as product assortment or product portfolio, refers to the complete set of products and/or services offered by a firm.
What are the components of merchandise management?
There are four key components of merchandising: buying, planning, managing, and controlling. These four components must lead to, above all, providing the store's customers a highly desirable merchandise mix. This mix needs to be adjusted as the needs of the store's target market customer's change.
Why does managing merchandise within a category by brand lead to inefficiencies?
AManaging merchandise within a category by brand can lead to inefficiencies because it fails to
What is a stocking keeping unit?
A. A Stocking-Keeping Unit (SKU) is the smallest unit available for inventory control.
Who manages the department of merchandise classifications?
D. The DMM, who manages the department, is responsible for several merchandise classifications E. It is managed by a general merchandise manager (GMM)
What are the key parameters of a buffer stock?
Buffer Stock Parameters. Some of the key parameters of having a safety stock are: 1. Accurate forecasting regarding demand & supply can help evaluate volumes. 2. Refill frequency required in order to replenish the stock. 3.
Why is buffer stock important?
Buffer stock is kept as an extra backup to prepare for any uncertain business situations. Buffer stock is also known as strategic stock or safety stock or buffer inventory. It is an important aspect in inventory management.
What is Buffer Stock?
Buffer stock is an additionally stored volume of goods which is kept to meet any sudden future demand or supply fluctuations. It is a backup stock, which retains some kind of buffer to protect in case of uncertain future. Buffer stock is kept as an extra backup to prepare for any uncertain business situations.
Why is buffer stock used?
Buffer stock is used in production or other inventory situations to ensure that exceptional or unpredictable shortages or demands can be met with some degree of certainty. Safety stock is generally held when there is uncertainty in the demand level or lead time for the product.
What happens if you have too much stock?
Too much stock can result in high inventory carrying costs. Too less stock can cause repeated occurrences of stock-outs. Hence, businesses need to maintain a fine balance and decide on the amount of buffer inventory to be held.
What happens if a product has a shorter shelf life?
1. In case of shorter shelf life, the products can get damaged and be rendered useless.
Do seasonal variations need to be considered by storing buffer stock?
Seasonal variations also need to be considered by storing buffer stock.
Which segment places more value on the price of a product?
Customers in the platinum segment place more value on the price of a product.
Can customers realize the amount of information being collected without their knowledge?
Customers cannot realize the amount of information being collected without their knowledge.
Why does managing merchandise within a category by brand lead to inefficiencies?
A. Managing merchandise within a category by brand can lead to inefficiencies because it fails to consider the interdependencies between SKUs in the category.
What is a stock keeping unit?
A. A stock-keeping unit (SKU) is the smallest unit available for inventory control.
Who manages the department responsible for several merchandise classifications?
D. The DMM, who manage s the department, is responsible for several merchandise classifications.