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In: Operations Management

How do the engro fertilizers company manage its inventory, what type of the inventory the company...

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?
this should be 700 words. kindly do this as soon as possible. kindly dont write copy paste

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Expert Solution

The fertilizer industry works on very thin profit margins, however engro fertilizers company has a good Client base in the territory catering to almost 30 % needs of the market. This means they have a regular client base, and already know how much stock they need in the inventory to service the needs of the Clients. Another important factor that engro fertilizers company always considers in its strategy formulation is the changing prices of raw materials very frequently. Based on the demand and market analysis, and these variations the minimum stock level and maximum stock level in the inventory keeps on changing for engro fertilizers company.

The inventory management models that engro fertilizers company uses are a combination of " stock level" and "economic order quantity", based on which they produce the product in different sets of continuous batches to perfectly fulfill the demands of the market. This allows them the flexibility to adapt to the changing prices of the raw materials from suppliers and maximise on their profits.

These inventory management techniques have helped the engro fertilizers company to spend less on their warehousing needs, and also helped them have more structured and organised warehouses, leading to minimum damage to product and longer life of fertilizers. The changing demand is also easily met with varying margins of profit which they can set for themselves.

Overall, it has helped the Company gain a competitive edge in the market and maximize on its profits.


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