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Operations | "Planning for Demand Uncertainties During Promotional Cycles of Modern Retail"

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Planning for Demand Uncertainties
During Promotional Cycles of Modern Retail

- by Sauraraj Nath & Vikrant P. Bawane *

Previous

Page - 7

Table 2: General Rules for Inventory Categorisation

Based on the criticality of an SKU, one can pay special attention to its availability rather than playing with each and every SKU. The concept can also be applied at product group level in a category.

Scale of the Categorisation Task

  • Categorise known critical items first (all locations)

  • Set up timetable for remaining items by location

  • Incorporate into process for adding SKUs

    Flexibility to Handle Inventory Categorisation

  • Fixed re-order levels for cat A

  • Floating re-order level for cat B / C

    Benefits

  • Clear policy for stock management

  • Rules can be altered to meet prevailing circumstances

  • Promotes adoption of automated stock control

  • Less manual intervention for products that do not need it

  • Establishes formal review programme
          * Validate category
          * Assess impact on product availability
          * Monitor stock value

    Next

    * Contributed by: -
    Sauraraj Nath & Vikrant P. Bawane,
    Post Graduate Programme in Agribusiness Management (PGPABM) II,
    National Institute of Agricultural Extension Management (MANAGE), Hyderabad.

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