Inventory Management of retail store.pptx

A PPT on ABC Classification and Turnover Ratio showcasing data-driven strategies to optimize inventory, enhance procurement, and improve profitability through effective stock management.

1. INVENTORY MANAGEMENT OF A RETAIL OUTLET A STUDY ON EFFICIENT INVENTORY MANAGEMENT STRATEGIES Presented By : Group 4 Aditya Mahapatra UM24132 Abhishek Namdeo UM24133 Liza Acharya UM24162 Milan Mohapatra UM24164 Prasad Panchal UM24174 Sankalp Rath UM24184

2. INTRODUCTION IMPORTANCE OF INVENTORY MANAGEMENT Inventory management ensures the right stock levels to meet demand while minimizing costs. Affects profitability, customer satisfaction, and operational efficiency. Prevents stockouts that cause lost sales and overstocking that leads to high holding costs. OBJECTIVES OF THE STUDY Assess inventory replenishment efficiency using key performance indicators (KPIs). Identify fast-moving and slow-moving products to optimize stock levels. Evaluate inventory turnover and suggest improvements for better profitability.

3. ASSESSING INVENTORY REPLENISHMENT EFFICIENCY Key Performance Indicators (KPIs) Replenishment Lead Time: Time taken from placing an order to receiving stock. Order Accuracy: Percentage of correctly fulfilled orders to avoid discrepancies. Supplier Performance: Reliability of suppliers in delivering on time and maintaining product quality. Demand Forecasting Accuracy: Ensuring stock levels align with actual customer demand to minimize excess or shortages. REPLENISHMENT TIME ORDER ACCURACY DEMAND FORECASTING ACCURACY SUPPLIER PERFORMANCE

4. IDENTIFYING FAST-MOVING AND SLOW-MOVING PRODUCTS Fast-moving products: High sales velocity, require frequent replenishment to meet demand. Slow-moving products: Lower demand, may indicate changing consumer preferences or inefficient stock management. ABC Classification: Categorizes products based on value contribution and demand: Category A: High-value, high-demand items requiring tight inventory control. Category B: Moderate-value, moderate-demand items needing balanced procurement. Category C: Low-value, low-demand items essential for variety but needing careful stock management.

5. ABC CLASSIFICATION ANALYSIS Key Insights: Category A products contribute most to stock value but require efficient turnover to prevent overinvestment. Category B products strike a balance between demand and cost. Category C products have minimal financial impact but should be managed carefully to prevent wastage. ABC Category Number of Products Percentage of Total Products Stock Value Contribution Stock Value Percentage A 15 33.33% 166,500.00 67.00% B 20 44.44% 60,000.00 24.00% C 10 22.22% 21,978.79 9.00%

6. ABC Category Number of Products Percentage of Total Products Stock Value Contribution Stock Value Percentage A 15 33.33% 166,500.00 67.00% B 20 44.44% 60,000.00 24.00% C 10 22.22% 21,978.79 9.00% ABC CLASSIFICATION ANALYSIS

7. Efficiency Category Number of Products High Efficiency (>0.66) 17 Moderate Efficiency (0.33-0.66) 9 Low Efficiency (<0.33) 19 TURNOVER RATIO ANALYSIS Key Insights: High-efficiency products require frequent restocking and efficient supply chain strategies. Moderate-efficiency products need periodic stock reviews to prevent under or overstocking. Low-efficiency products tie up storage space, requiring intervention like promotions or markdowns.

8. TURNOVER RATIO ANALYSIS Efficiency Category Number of Products High Efficiency (>0.66) 17 Moderate Efficiency (0.33-0.66) 09 Low Efficiency (<0.33) 19

9. KEY FINDINGS Category A: Significant stock value contribution, but some items have slow turnover, leading to financial risk. Category B: Serves as the backbone of inventory movement, ensuring stock balance. Category C: Most prone to excess stock, increasing storage costs. High-efficiency products: Need lean supply chain strategies for quick restocking. Low-efficiency products: Require strategic interventions like promotions, bundling, or discontinuation.

10. RECOMMENDATIONS For Category A: Prioritize replenishment for high-turnover items and optimize ordering cycles for slow movers. For Category B: Ensure a steady stock supply while avoiding excessive safety stock. For Category C: Implement discounting, bundling, or reduce procurement frequency to minimize holding costs. Enhance Forecasting: Leverage AI-driven demand forecasting to maintain optimal stock levels. Automate Stock Tracking: Implement real-time inventory analytics to prevent inefficiencies. Optimize Supplier Collaboration: Negotiate favorable terms and reduce lead times for frequently sold products.

11. CONCLUSION Summary: Effective inventory management improves cash flow, reduces wastage, and enhances customer satisfaction. Next Steps: Implement recommended strategies and track performance over the next business cycle. Regularly update ABC classification and turnover analysis to align with market trends. Use data-driven decision-making for procurement and inventory control.

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