Question

Why is supply chain management and inventory control important to retailers?

Answer 1

Retailers need to get involved in the practice of supply chain management in order to maintain their profitability by not running into a stockout or overstocking leaving no room for constantly moving inventory items and therefore reducing profitability. The fact that retailers have a physical space constraint creates an innate requirement for inventory management and the need for understanding lead time, restocking levels, safety stock, and other demand-based factors creates an appropriate reason for the use of supply chain management tactics. Supply chain management would also provide the consideration for optimal staffing processes as well as through the consideration of developing and implementing the latest technology, making the overall process of management more efficient. It shifts the retailer's state of mind from the price of a product to the total cost of ownership, making it so that the best course of action can be dictated through proper planning, forecasting and the use of statistical analysis.

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