Role in the supply chain In Packers and Movers Pune

Packers and Movers Pune

Movers and Packers Pune

The disparity is also intentional at a retail store where inventory is held in anticipation of future demand. An important role that inventory plays in the supply chain is to increase the quantity of demand that can be satisfied by having product ready and available when the customer wants it.

Another significant role of inventory is to optimize cost by exploiting economies of scale that may exist during both production and distribution.

Inventory is spread across the entire supply chain from raw materials to work in process to finished goods that supplier manufactures distributors and retailers hold. Inventory is a most important source of cost in any supply chain and it has an enormous impact on responsiveness.

 If we think of the responsiveness range the location and quantity of inventory can move the supply chain from one end of the spectrum to the other. For example an apparel supply chain with high inventory levels at the retail store has a high level of responsiveness because a consumer can walk in to a store and walk out with the shirt he is looking for. In contrast an apparel supply chain with little inventory would be very unresponsive.

A customer wanting a shirt would have to order it and wait several weeks or even months for it to be manufactured depending on how little inventory existed in the supply chain.

Inventory also has a major impact on the material flow time in a supply chain. Material flow time is the time taken between the points at which material enters the supply chain to the point at which it exits.

Another important area where inventory has significant impost is throughput. For a supply chain throughput is the rate at which sales occur. If inventory is represents by I flow by t and throughput by d the three can be related using Little s law as