Introduction to Inventory Management:

Inventory management is a strategic process that involves overseeing and controlling the flow of goods and materials within a business. Its primary goal is to ensure that the right amount of inventory is maintained to meet customer demand efficiently. By doing so$,$ businesses can avoid delays in fulfilling orders, thereby enhancing customer satisfaction and loyalty. Moreover, effective inventory management also focuses on optimizing costs associated with holding stock. This includes expenses such as storage, handling, insurance, and the risk of obsolescence. By managing inventory levels accurately, businesses can minimize these costs and improve their overall financial performance.

Inventory management practices are applicable to businesses of all sizes, ranging from small$-$scale enterprises to large corporations. Regardless of the scale, businesses must implement robust inventory management strategies to maintain operational efficiency, meet customer expectations, and stay competitive in the market.

Many small$-$scale businesses often overlook the importance of proper inventory management, which can ultimately lead to their downfall. The failure to implement effective inventory management practices can result in various challenges such as stockouts, overstocking, increased holding costs, and poor customer service. For instance, inadequate inventory control may lead to stockouts, where businesses run out of popular items, causing dissatisfaction among customers and lost sales opportunities. On the other hand, overstocking ties up capital and warehouse space unnecessarily, leading to increased holding costs and the risk of inventory obsolescence.

These issues can significantly impact a small business's profitability and sustainability. Therefore, small$-$scale enterprises must recognize the critical role of inventory management in their operations and implement strategies to optimize inventory levels, meet customer demand effectively, and ensure long$-$term success.

Instructions

For this assignment, students are tasked with conducting an assignment on inventory management in small$-$scale businesses. Below are the instructions for the assignment:

$1.$ Identify items: identify items $($a minimum of three items$)$ that require an inventory management system to improve business performance.

$2.$ Conduct cost analysis: conduct a coherent cost analysis and suggest an inventory management system of those items in the businesses.

$3.$ Provide insights: the analysis should provide valuable insights for businesses to make informed decisions regarding:

$$ inventory replenishment$/$order quantity $($EOQ$),$

$$ order cycles, and

$$ re$-$order points.

Ultimately, the goal of this assignment is to assist small$-$scale businesses improve their inventory management practices by addressing inventory$-$related challenges and enhancing their overall operational efficiency and profitability.

Use excel QM software to:

a$)$ Record inventory data

b$)$ Determine the Economic Order Quantity $($EOQ$)$

c$)$ Determine the order cycle times

d$)$ Determine the re$-$order points

Report structure:

$1.$ The report should not be more than $5$ pages long

$2.$ The report should have the following format:

$$ Overview

$$ Introduction

$$ Literature review

$$ Methodology

$$ Findings

$$ Conclusion and recommendations

$$ References