Inventory, Transportation and Warehousing
The writer has to pay close attention to APA 6th Edition for this paper, it is also critical that the references
follow APA 6th edition and must include all doi where necessary and also the UR links when sources are
taking from the internet. In the previous papers the writer has giving very little attention to that. its is very
important that he or she take note of that and properly reference the paper.
The are two main points to discussed in this paper and the writer must clearly and detail respond to those
two points.
INVENTORY, TRANSPORTATION AND WAREHOUSING 2
Inventory, Transportation and warehousing
Overstocking refers to having excess amounts of stock than is necessary. This is usually
attributed to poor management of the inventory, demand or material flow particularly to process
management. This is also considered as a form of losing revenue as it is tied up in capital and
additional costs of storing the items. Under-stocking on the other hand refers to having
inadequate amount in relation to items or supplies. These are the two main issues affecting the
efficient and effective means of supplying fashion clothes to large stores (Jaber, 2009).
This has in turn, led to a number of drawbacks in the efforts of the firm to achieving its
desired goals and objectives. In the case of overstocking, it leads to various consequences. First,
the funds are held up in capital and these funds could have been used in different other areas that
would have boosted the company on its path to success. Second, the excess stock will require
additional space and this means incurring additional costs for storage space. Furthermore, the
cost will also include maintenance fees. Third, the stock may deteriorate in quality and at times
become obsolete given the fast changing trend of fashion (‘Reduce the risk of overstocking’,
2012).
In the case of under-stocking, it leads to poor operation of the production process and
poor delivery schedules. Under-stocking may lead to paying the labor force yet they were idle
most of the period waiting on the production process. The corporate image of the firm may be
tarnished as it does not meet the needs of customers. Meeting the demands of the customers may
prove difficult and result in unfavorable prices (Müller, 2011).
It is important to maintain a balance between overstocking and under-stocking, and in the
current modern business world, this requires the use of a given form of system. A common
INVENTORY, TRANSPORTATION AND WAREHOUSING 3
system that can be used in order to manage inventories efficiently and effectively is the barcode
system. When the barcode is applied at the point of sale, usually at a computerized cash register,
the sales information of the items is relayed to a larger system that supports the usage
information and statistics. This information will be used by the purchasing department in making
purchase decisions on the grounds of sales and the level of inventory (‘Inventory Management’,
2010).
There are a number of complications linked to coming up with significant costs
associated with activities in a warehouse. These might include a poor system used in the storage
process from the time the items are offloaded into the warehouse to the time they are loaded and
dispatched. Another difficulty that adds to the process is the distance of the warehouse from the
production facility. Furthermore, the arrangement used in the warehouse and the size of the
warehouse also impacts negatively in coming up with efficient costs (Richards, 2011).
Viable solutions to mitigating some of the difficulties include coming up with a proper
warehouse system such as FIFO: this will provide a basis for knowing how the products will be
arranged in the warehouse and how they will be dispatched. This will help in a formal
arrangement that will be efficient and save on time which will eventually save on costs. It is
important that the location of the warehouse be near the production facility; this will save on
transportation costs and will make it easier to manage activities in the warehouse.
INVENTORY, TRANSPORTATION AND WAREHOUSING 4
References
Inventory Management. (2010). Vox Sanguinis, 98(3p1), e295-e363.
Jaber, M. (2009). Inventory management. Boca Raton: CRC Press.
Müller, M. (2011). Essentials of inventory management. New York: AMACOM.
Reduce the risk of overstocking. (2012). Br Dent J, 213(11), 578-578.
Richards, G. (2011). Warehouse management. London: Kogan Page.
