Question

How do the engro fertilizers company manage its inventory, what type of the inventory the company have ? which inventory model they apply in their organization? what benifits company have after using inventory manahement tecjniques? word should be 700

this is generally asked about the company. this isnt related to any case.

Answer 1

Engro Fertilizers has a huge chunk of share in the local market and thus has a lot of dedicated clients. The new clients ratio to old clients is very less, which is very helpful for Engro Fertilizers in terms of Inventory Management. Moreover in the fertilizer industry the profit margins are very less and the prices of raw materials also change very frequently. To cope up with these changes and not to stress the inventory line too much, Engro uses Just in time method, as they already know how much inventory to keep for their regular clients, and how much variance to keep up in the market.

Along with it they use the Inventory Production Quantity model, to make sure the right amount of batches of fertilizers are in the inventory to fulfill the needs in sets and batches.This has benefited the company to save a lot of money in this less profit industry. There are minimal losses because there is limited inventory to stock and manage, the maintenance cost is less, and in this way they make the best use of changing prices of raw material.

The fast stock movement, and lower average inventory conversion time period is their strategy to maximize the returns. This has not just reduced the storage costs for them, but has helped them improve the quality slowly and steadily without worrying about previous stock.