Final IT Proposal
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PresentationonConvincingTechnologyDecisionMakers.pptxPoor Inventory Management
Business Problem
Poor inventory management leads to stockouts and overstocking
4% of global retail revenue lost due to out of stock (Liu et al., 2025)
Equals approximately 984 billion dollars in losses
Inventory shortages reduce customer loyalty and repeat purchases
Customers switch to competitors when products are unavailable
One of the biggest problems for retail businesses is inefficient inventory management which causes stock outages and overstocks. Liu et al. (2025) estimates that 4% of annual retail turnover is lost from stockouts (a global loss of almost 984 billion dollars). This demonstrates the impact on business performance. Furthermore, studies show that out of stock situations have a negative impact on both short term and long term consumer behaviour, decreasing repeat purchasing and loyalty. Without the right product, customers may switch to competitors, which in turn lowers long term revenues and customer loyalty.
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Business and Customer Needs
Need for accurate and real time inventory tracking
Traditional systems fail under demand uncertainty (Ngartera et al., 2026)
Businesses require better forecasting and data driven decisions
Customers expect product availability and quick service
Improved efficiency and reliability are essential for satisfaction
Real-time inventory data is essential for companies to avoid losses and streamline operations. Ngartera et al. (2026) note that making inventory decisions with uncertain demand results in significant economic losses, particularly with traditional inventory systems. This findings calls for improved forecasting and decision-making. Consumers want products when they need them and they want them to be reliable and convenient. If companies cannot meet these needs, it results in decreased satisfaction. As such, businesses need to implement systems to increase product availability, minimise waiting times, and satisfy customers.
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IT Solution and Value
The solution is to adopt a cloud-based Inventory Management System with real time monitoring and analytics. This system can automatically track inventory levels, forecast future demand and eliminate human errors in manual counting. This system enhances accuracy and visibility to avoid stockouts and overstock. This in turn increases revenue, decreases costs and enhances customer loyalty. This IT solution enables business expansion, enhances competitiveness, and facilitates data-driven decision making.
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Implement a cloud-based Inventory Management System
Enables real time stock monitoring and automated updates
Uses data analytics to predict demand and reduce errors
Prevents stockouts and overstocking
Increases sales and reduces operational costs
Improves customer satisfaction and business performance
References
Liu, Y., Kalaitzi, D., Wang, M., & Papanagnou, C. (2025). A Machine Learning Approach to Inventory Stockout Prediction. Journal of Digital Economy, 4. https://doi.org/10.1016/j.jdec.2025.06.002
Ngartera, L., Nadarajah, S., Koina, R., & Gningue, Y. (2026). Stochastic Inventory Optimization with Coherent Risk Measures: A Decision-Theoretic Framework for Probabilistic Forecasting and Constrained Optimization. Journal of Risk and Financial Management, 19(3), 173. https://doi.org/10.3390/jrfm19030173
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