Answered: Use information in the case study and…

Understanding Business

12th Edition

ISBN:9781259929434

Author:William Nickels

Publisher:William Nickels

Chapter1: Taking Risks And Making Profits Within The Dynamic Business Environment

Section: Chapter Questions

Problem 1CE

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Use information in the case study and critically examine the process of receiving materials at the warehouse in a Retail. Enterprise in the Far South of Santa Catarina. Include relevant examples to support your answer.

Transcribed Image Text:Read the Case study below and answer ALL questions that follow. Retail Enterprise in the Far South of Santa Catarina. In search of a more effective insertion in the market, companies adopt many tools to obtain an even better performance. Any differential can be decisive for the company to stand out from the competition and one of those is a differential inventory management effective. Studies relating to stocks and its forms of management gain more and more importance organizationally, but still there are few companies that manage their inventory in an organized manner. Work with stocks becomes inevitable for companies, since it is almost impossible or impractical to determine the demand for products and services and with this difficulty, the companies need greater control of inventory and storage of material. Typically, companies keep many and different materials in stock and the administration of such material is not an easy task. Items with different patterns of demand and specific features make the complexity in the administration of materials increase as a result of the need for differentiated control. This problem can be solved by inventory management, and planning strategies to be applied to each situation. This work highlights the importance of the application of the inventory management in a retail enterprise in the Far South of Santa Catarina, which sells diapers, women's clothing, men's and children's, as well as articles for bed, bath and beyond. The company has no control of inventory and has a great deficiency in areas of storage and purchases. The company has management of more than 65 years in the retail market, being 15 years with current administration. With three units, all located at the southern end of Santa Catarina, it is a reference in the tissues, female, male and children's clothing, as well as products for bed, bath and beyond. The company never owned stocks control and has a large disability in storage areas and shopping. The company does not have a strategy of inventory management and preventing putting it into practice is that there is no control of goods: it is not known the amount of items in stock, or missing items. As the diversity of products offered wide and in large quantities, some of the obstacles to this inventory control are the time it would take and the difficulty of doing this survey with the company in operation. The company already has a system of computerization. In it, there are inventory management tools, which are not used as they should, because the inclusion of the information is incomplete, making the tools unusable. The amount of stockpiled goods are far above what is necessary and there is no estimate of the value of this stock still. The current administration doesn't usually perform burning and don't see the large amounts of stock as injury to financial results, because the merchandise stocked now can be sold in the future. To have more space and reduce the amount of parts in the warehouse, opened a store of liquidation, only with some promotional products of previous collections, however, the result did not go as planned: sales were not satisfactory and stocks were not reduced, generating another new deposit of promotional pieces. In the area of sales, customer profile is already known. Most goods sold are easily identified through management reports, because all the outputs of goods are controlled by the company. Despite the known profile of customers and sales control, there is not yet a planning of purchases. Purchases are made to supply what is sold and no inventory control, applications can only be made when the merchandise is a Joker, when the merchandise is running out or when it is missing. On the changes of seasons - spring/summer and autumn/winter-are made larger orders, based on surveys carried out by the employees who work in the Organisation of the shop and stockists. There is a lack of information of when and in what quantity is required to buy. There is a record of previous orders, however, they are stored in a spreadsheet, separated by suppliers and not by categories, without direct access to the system. Normally payments to suppliers are made within 90 to 120 days, which means that practically all the stock of the company is paid and the company does not have debts with the suppliers.

In addition to a partner owner responsible for the part of purchasing and invoicing, three more stockists working in warehouse
and they all perform the same functions: receipt and goods Conference, separation, labelling, distribution models for sales,
inventory, surveys organization, as well as assist the sellers in search for parts. The three employees, only one makes use of
the system. The major difficulties encountered in the sector are the lack of space for storage of the products and the weight
load. With approximately 211 m², the deposit is located above the shop, and is divided into three large rooms usually called
first, second and third deposits. On first deposit are stored articles from bed, bath & beyond, kitchen, curtains and fabrics. In
the second are stored the child articles, juvenile, female and male. On the third deposit are two workstations with computers
and are stored winter clothes too, which occupy a lot of space and do not fit in the second deposit: suits, sweatshirts, jackets
and leather fibre, in addition to the stockings and handkerchiefs. The two existing bathrooms on this floor are unusable for that
purpose; a serves as old files and deposit the other stores the pieces that will be returned to suppliers.
The goods are received in two ways: in the warehouse or at the store. In the store, the merchandise is received only when
there are few units and the product is already registered in the company. In this case, the pieces are usually received by the
Manager or by the sales supervisor, that make the Conference the amount received to the note and already offer the product
for sale, without going through the deposit and not including the goods received in the system, or is the inventory control
these goods do not exist in the store. However, most of the deliveries are made in the warehouse, where they are received by
the broker, which confers on the volume received and directs to the respective storage location. After this first Conference, the
received box is opened, all the parts are separated by the reference that comes standard and accounted for individually. This
count is passed on to partner owner, which confirms the quantities with the invoice. In the next process, the owner performs
the registration of partner new parts or alteration of the information in the parts already registered and determines the value of
the product. To include the registration of a new commodity, is generated a numeric code specific to each model. Currently the
first part of registration is completed with the following information: description of the goods (generally using the same
nomenclature that comes standard), unit of measure (unit, weight, metro), reference (factory code specific to each model),
cost price, sale price, group (primary Division of categories), cost center (specific products Division), make and year of
collection. The second part of registration is for the bars, which are the sizes and colors of each merchandise, typically
registered standard form: all products have equal sizes and colors in the system. In old records, the only information
registered properly were the description of the goods, unit of measure, and the selling price-tag and year of collection often
were not inserted and the sizes and colors followed the same pattern. Spare parts, information is updated only if there is price
update. With the registration of goods concluded, begins the process of labelling. Then contain the store name, product
description, code number, barcode and the selling price. This process is accomplished by a partner, delivering the tags at
stockists, which in turn label goods and divide the pieces between the store and the warehouse. The placement of the labels
is the longest process function held in stock. Only after the distribution of the products for sale that the invoice follows to
financial clerks.
Source: Vilson Menegon Bristot (2018). Inventory Management: Case Study in a Retail Enterprise in the Far South of Santa
Catarina. American Journal of Engineering Research (AJER) e-ISSN: 2320-0847 p-ISSN: 2320-0936 Volume-7, Issue-3, pp-
300-309.

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