Topic: Inventory Management
What is a literature review?
“A literature review discusses published information in a particular subject area, and sometimes
information in a particular subject area within a certain time period.
A literature review can be just a simple summary of the sources, but it usually has an
organizational pattern and combines both summary and synthesis. A summary is a recap of the
important information of the source, but a synthesis is a re-organization, or a reshuffling, of that
information. It might give a new interpretation of old material or combine new with old
interpretations. Or it might trace the intellectual progression of the field, including major debates.
And depending on the situation, the literature review may evaluate the sources and advise the
reader on the most pertinent or relevant.”[i]
How is a literature review different from an academic research paper?
“The main focus of an academic research paper is to develop a new argument, and a research
paper will contain a literature review as one of its parts. In a research paper, you use the literature
as a foundation and as support for a new insight that you contribute. The focus of a literature
review, however, is to summarize and synthesize the arguments and ideas of others without adding
new contributions.”[ii] The academic research paper also covers a range of sources, but it is
usually a select number of sources, because the emphasis is on the argument. Likewise, a literature
review can also have an “argument,” but it is not as important as covering a number of sources. In
short, an academic research paper and a literature review contain some of the same elements. In
fact, many academic research papers will contain a literature review section. But it is the aspect of
the study (the argument or the sources) that is emphasized that determines what type of document
it is.
Why write literature reviews?
“Literature reviews provide you with a handy guide to a particular topic. If you have limited time
to conduct research, literature reviews can give you an overview or act as a stepping stone. For
professionals, they are useful reports that keep them up to date with what is current in the field.
For scholars, the depth and breadth of the literature review emphasizes the credibility of the writer
in his or her field. Literature reviews also provide a solid background for a research paper’s
investigation. Comprehensive knowledge of the literature of the field is essential to most research
papers.”[iii]
What is the format for literature reviews?
“Just like most academic papers, literature reviews also must contain at least three basic elements:
an introduction or background information section; the body of the review containing the
discussion of sources; and, finally, a conclusion and/or recommendations section to end the paper.
Introduction: Gives a quick idea of the topic of the literature review, such as
the central theme or organizational pattern.
Body: Contains your discussion of sources and is organized thematically.
Conclusions/Recommendations: Discuss what you have drawn from reviewing
literature so far. Where might the discussion proceed?”[iv]
What is a thematic literature review?
“Thematic reviews of literature are organized around a topic or issue, rather than the progression
of time.”v
“Sometimes, though, you might need to add additional sections that are necessary for your study,
but do not fit in the organizational strategy of the body. What other sections you include in the
body is up to you. Put in only what is necessary. Here are a few other sections you might want to
consider:
Current Situation: Information necessary to understand the topic or focus of
the literature review.
History: The chronological progression of the field, the literature, or an idea
that is necessary to understand the literature review, if the body of the
literature review is not already a chronology.
Methods and/or Standards: The criteria you used to select the sources in your
literature review or the way in which you present your information. For
instance, you might explain that your review includes only peer-reviewed
articles and journals.
Questions for Further Research: What questions about the field has the review
sparked? How will you further your research as a result of the review?”vi
This section is required and must be included in your paper.
This section of the literature review is where you integrate faith and learning
in this course. After reading Every Good Endeavor: Connecting Your Work to
God’s Work,” write a 3–5-page section that integrates the Genesis model, i.e.,
the creation-fall-redemption-consummation framework, with the learning
objectives of this course, which is part of the required 19 pages of content.
Conclude with how your integration may be used for furthering God’s
purposes for business on earth.
http://booksdescr.org/ads.php?md5=D87806901321E6DF...
Important Points to Consider
The paper is to be written in strict conformance to current APA standards, and must contain at
least 19 pages of content (excluding the title page, abstract, and references), utilizing at least 12
scholarly references.
The paper is to be submitted through SafeAssign at the end of Module/Week 8. It is highly
recommended that you download and read the instructions to avoid any stress created by
issues that are the result of waiting until the last minute.
A SafeAssign draft check will be provided for you to use to improve your
Originality Score prior to your final submission.
Three levels of current APA headings must be used throughout the paper, as this is a graduate-
level research paper.
Some students do not fully understand the difference between plagiarism and paraphrasing.
Paraphrasing is when you take a source or someone else’s idea and say it in your own words.
When you paraphrase, you must still give the author’s name, date, title of the source, the scholarly
journal where it came from, and the exact website address or book.
However, when you directly quote a source, it must have quotation marks around the quote, or (if
40 words or more) it must be set in block quotation format. You must also give detailed
information of where you acquired the quote.
For the purpose of this academic paper, adhere to the follow rules when quoting or using a source:
Do not directly quote more than 120 words from any one source.
If the source is 2,000 words or less, do not directly quote more than 50 words from any one
source.
Do not use the same source more than a total of 3 times within the whole document for quoting or
paraphrasing.
Quotes must contain the section (if provided) and paragraph or page numbers of the quote, and
this information must be placed in the reference.
In all instances, use current APA guidelines for citations and references.
Running Head: INVENTORY MANAGEMENT
Inventory Management: A Literature Review
Student’s Name
Professor’s Name
Course Title
Date of Submission
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INVENTORY MANAGEMENT
Inventory Management: A Literature Review
In any organization or entity, all functions and operations are usually interlinked
and connected to each other (Atie, et al, 2016). Some of the operational aspects such as
logistics and supply chain management form the basis and foundation of the business
delivery functions. For an organization to be successful in these operations, it must
always ensure that it maintains an optimum inventory, meaning that the management
must avoid over or under inventory in order to maintain the financial stability and health
of the business (Bose, 2012; Atie, et al, 2016).
According to Singh and Verma, (2017), inventory the “raw materials, work-in-
process products and finished goods that are usually considered by a business as assets
and that will be ready for sale. For a holistic conceptualization of inventory management,
this paper will consider the definition of inventory management as proposed by Singh
and Verma, (2017, 3868)“continuing process of planning, organizing and controlling
inventory that aims at minimizing the investment in inventory while balancing supply and
demand.”
With respect to various theoretical perspectives, there exists a number of
inventory management practices such as vendor managed inventory, just in time,
forecasting, collaborative planning and replacement, automatic replenishments and
material requirement planning (Urciuoli & Hintsa, 2017; Atnafu & Balda, 2018).
However, various studies have shown that there is restricted knowledge in the application
and appreciation of these practices in most industries both locally and internationally
(Atnafu & Balda, 2018). This lack of appreciation explains the increased wastage of
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materials experienced by organizations, longer-lead time, loss of sales, shortage of
products and other factors such as increasing production cost among others. This
arguably means that there is an acute difference between the theoretical and practical
approach to inventory management in organizations (Urciuoli & Hintsa, 2017). The
following theories discuss the practices of inventory management.
Theories in Inventory Management
Strategic Choice Theory
The strategic choice theory argues that there is a link between the choices that the
management of an organization make to the organization’s internal and external
environment. This theory then emphasizes that these choices have a great impact on
organizational performance (Kumar, Mishra & George, 2013). Campling and Michelson
(1998), created a strategic choice model that depicts this interrelationship between the
three aspects; environment, management’s action/choices and organizational
performance. However, this theory failed in the lack of consideration of other
organizational aspects that lead to organizational success such as the structure of
operation, technology among other factors. Additionally, Urciuoli and Hintsa, (2017)
argue that this theory limits itself to choice and focuses on strategic choices in contrast to
the functional approach which is a useful element in supply chains in organizations.
Transaction Cost Analysis
This theory argues and holds that supply chain expenses must be maintained at a
minimal level. According to Kumar, Mishra & George, (2013), this theory is widely
supported and applied in various economic and organizational structures. One early
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implementer of this theory was Williamson who in1981 implemented this theory into the
model of general equilibrium. Williamson (1981) argued that organizations can reduce
their operational costs by simultaneously advancing trust and cost of transaction via
vertical integration. He further argues that this integration is more likely to decrease the
expenses incurred in inventory management while improving the service delivery both
internally and externally. One major objective of an organization is to reduce costs which
include transaction costs in order to make significant profits (Kumar, Mishra & George,
2013). Transactional cost theory, therefore, creates a mechanism in which an organization
reduces these costs to achieve and increase its level of profitability.
Theory of Economic Order Quantity (EOQ)
The EOQ model focuses on ordering the portions of inventories that cause
instability of costs between the inventory holding cost and pre-order costs. However,
Reynard, Bussard, and Martin, (2016) hold that in order to accurately compute the EOQ,
various factors must be met. These are 1) there should be known and constant costs of
holding a stock, 2) the lead –time cycle should be known and constant, 3) the price per
unit should also be constant, 4) there should be immediate replenishments and 5) stock-
outs should not be allowed (Reynard, Bussard, & Martin, (2016). A major challenge
noted with this theory/model is that it tends to ignore the need for shield stocks which are
usually reserved in cases of deviations in lead-time and demand. One major assumption
that this theory makes is that all other variables are constant and disregards the fact that
uncertainties are usually frequent in the market and are ordinary occurrences in some
organizations.
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How Inventory Management Relates to other Organizational Practices
But how does inventory management relate to other organizational activities?
According to El Maataoui, et.al (2017) , the role of supply chain management is to
provide high velocity and quality relevant information in order to advice the organization
and other stakeholders on timely flow of materials in organizing. According to Doley,
(2005) inventory management is directly linked to material management. This
organizational process involves the procurement, inventory control of raw materials as
well as scheduling of transportation of the raw materials among other activities (Doley,
2005; El Maataoui, et.al 2017). Ideally, inventory management ensures a consistent and
updated and continuous flow of goods and services a function that material management
integrates. This means that both management procedures require proper facilitation by
each other through proper record keeping, control and managing of materials to meet the
needs of demand and supply.
Inventory management is also linked with procurement, which is where an
organization purchases materials and services from suppliers in order to facilitate its
operations. In this regard, inventory management is needed in this procurement directive
in order to identify the need of these goods and services, control, manage and organize
the delivery as well as record keeping for consistent verification of the future need for
these products. According to Muckstadt and Sapra, (2010), inventory relates directly to
purchase economies where organizations need to accumulate physical supply inventory in
order to realize purchase economies.
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Warehousing and storage is another organizational aspect that directly relates to
inventory management and Muckstadt and Sapra, (2010) points out that warehousing is a
part of the logistics system that stores goods at and between the origin and the point of
consumption. Inventory management ensures that the collection of data and information
regarding the number, quality, and usage of goods stored in the warehouses is well
coordinated in order to facilitate tracking and distribution of these products to the
endpoint. Additionally, improving inventory management involves reducing the time
taken to transport the goods to the market which means that it takes inventory
management ensures proper coordination and management of how fast goods enter and
leave the warehouses.
Supporting Tools for Inventory Management
According to Sittig, et.al (2010), there are two main supporting tools for inventory
management which usually aide legible and intelligent management of the control and
management of inventories. They are the cause-effect diagram and the Multiple Criteria
Decision Making (MCDM). Muckstadt and Sapra, (2010) define a cause-effect diagram
as a structured process where ideas are organized into logical groupings in order to
brainstorm and perform exercises that help in problem-solving. Due to its fish-bone
structure, the cause-effect diagram is also referred to as a fishbone diagram/analysis. This
diagram helps in the identification of the causes of a problem most. It is made up of seven
main cause categories which include manpower, management, milieu, measure,
machinery, method and materials (Muckstadt and Sapra, 2010; Sittig, et.al, 2010).
According to Bose (2012), one of the limitations of the fishbone analysis tool is that it
does not provide the sequence of causes. He argues that in a real life scenario, a problem
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may occur due to a sequence of causes and that the reason for each cause cannot be the
same.
Another limitation is that it does not fully define the relationship between the
causes and fails to show the relevant details for each cause. According to Bose (2012),
the fishbone analysis is only applicable for use in pre-defined categories of causes and
not in situations where causes should be related to each other. The Multiple Criteria
Decision Making (MCDM) is a decision making criteria that consists of a finite set of
alternatives where a decision maker can choose any criteria and weight it according to the
importance. This evaluation process then leads to specific ratings which are then
aggregated on a weighting basis of the chosen criteria. Notably, they can be quantitative
or qualitative criteria depending on the importance and use. The main goal of this tool is
to determine whether an alternative is better than another in order to choose and make the
most appropriate decision (Muckstadt and Sapra, 2010).
Constraints affecting Inventory Management
According to Atnafu and Balda, (2018), there are various constraints that affect
the success of inventory management namely, uncertain demand, cost lead times,
production prices among others. Particularly SMEs face the challenges of escalating
inventory costs, untrained personnel as well as inaccurate record keeping and demand
variability (Patil & Divekar, 2014).
Inventory Costs
The cost determination, location, and control of inventory is a major challenge
among the SMEs (Atnafu & Balda, 2018). There are different types of costs that
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organizations incur in such cases. They include costs of stock outs, holding costs,
acquisition stocks among others. Acquisition costs, for example, include the costs of the
preparation of the acquisition process, supplier selection as well as negotiation costs. On
the other hand, holding costs include storage costs, power, light among other costs
incurred in the warehouses or places where the inventories are held. When there are
uncertain demand and poor market forecasting, organizations may suffer from such costs
which may lead to loss of production output, cost idle times as well as costs incurred in
rectifying the stock, which hurt the productivity of the organization.
Demand Variability
Demand variability in inventory management is another major concern where
demand distortion directly affects inventory management due to untimely profits (Patil &
Divekar, 2014). In some cases, organizations can make low demand forecasts and later
experience high demand. Such cases bring stock outs which then leads compromises on
customer responsiveness. Inversely, organizations may experience high stock levels
during low demand periods, face situations of high inventory (Patil & Divekar, 2014).
Generally, demand distortion due to unavailability or lack of correct information greatly
affects the inventory management of an organization.
Inadequate Information
Another major problem that inventory management faces is inadequate-
information sharing. According to Patil and Divekar, (2014), information sharing in the
different stages of the supply chain leads to cases of the bullwhip effect. Organizations
should understand that providing correct information leads to accurate and proper
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decision-making abilities and allows proper coordination both in the short-term and in the
long-term. Information Inadequacy also brings cases of varied demand patterns,
shortages, price variations and assumed government policies which then create
hindrances to effective supply chain management as a whole. In order for organizations
to succeed in inventory management, proper and accurate information must be provided
on different levels of the supply chain, information such as stock levels, shipments,
customer preferences, incurred and future costs, supplier information among others
(Cardinal Health, 2013).
Developing Trends in Inventory Management
In the recent past, there have been numerous interventions to revolutionize how
inventory management is conducted. For example, the introduction of ‘inventory is
waste’ philosophy using JIT production has been a major contribution towards its
development. This section reviews some other developments.
Omni-channel Retailing
One of the ongoing trends in inventory management is the stock control for
Omnichannel retailing. This is a new trend where organizations link the customers with
several online platforms such as online, social and mobile applications while at the same
time providing physical stores (in-store services). Here, the brands usually include a solid
inventory control mechanism that consolidates the sales from different channels. In the
current development, stores are increasingly being attuned to the advantages of the usage
of store level data in customizing supply to match demand. Using the advanced level data
from these stores, the organization is able to control the supply chains, distribution
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channels and avoid stock-outs. This ensures that it continuously tracks the status of its
stock using this data in order to capture or estimate future demand.
However, as sales increases from the different levels, control of inventory
becomes complex. In order to curb this, the organization will need to implement three
main solutions which are 1) creation of a stable safety stock level by ensuring no stock
outs which is achieved by providing more stock, 2) establishing more distribution centers
and 3) by implementing a great inventory control tool such as inventory software that
alerts of the stock levels in and consequently facilitates product forecasting.
Inventories promoting Experiential Retail
The second trend is inventoried that promote experiential retail. Experiential retail
is an upcoming trend that is developing fast with an example of Nordstrom Local which
is a line of smaller stores. These stores do not sell anything but provide a room where
customers can visit to try at a vast amount of inventory. Nordstrom Local, for example,
allows customers to try on various clothes without keeping inventory purchase in stock.
The customers then allow their stock to be shipped to their home locations which are
purely different practice from the traditional stock control.
Streaming Analytics
Another upcoming trend is streaming analytics which is the use of real-time data
in making and implementation of decisions. This is not a new concept but the
organizations which are extremely keen with their inventory management system see it
be very important. This is because it helps the organization to personalize the models of
its inventory and transforms it into a more data-driven approach. Some of the
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organizations that have been implementing this technology are Coca Cola and Real
Madrid FC among others. The advantage of this method is that it helps in making demand
forecasting, getting up-to-the-minute information about the location of the stock and
when you will get it, avoiding stock outs and getting real-time information on suppliers in
order to determine both their performance and the expected input of the organization.
Inventory Management Skills
Finally, new inventory management skills are also part of the developing trends in
inventory management. These skills include data and coding and algorithms, Application
Programming Interfaces (APIs), Enterprise resource planning (ERP) and reporting
technologies. Petit Bateau is an example of an organization that has sought these trends;
in its venture for tailored solutions, the company established a link of the POS (Vend)
with their accounting software (Xero), payments processor (Tyro) and online store
(Shopify). This way, the organization was able to track every aspect of its inventory from
stocks to payments and accounting information. Creation of such a consolidated
subsystem helps an organization to effectively monitor its operations to develop effective
performance.
Therefore, inventory management is a very sensitive organizational aspect that
form should be keen about. This is because this supply chain component determines how
the organizations succeed in delivering goods and services to customers and more
importantly meeting these needs in a timely manner. Organizations should understand
that inventory management is evolving and should, therefore, remain abreast with the
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advances in inventory management which help in the reduction of costs incurred and
hence promoting organizational profitability and performance.
An industry’s major concern is formulating an inventory model. This is because it
is hard to define the values of some factors while considering the reliability of any
process. This section analyzes the possible parameters that exist in models of inventory
management. The inventory management models are different based on the nature of the
information available on the existing features of the simulated system. The nature of a
mathematical model is deterministic when the value of the model is well defined.
Distribution models are probabilistic when there are existing random values with known
probability. In the face of uncertainty, it is important that the problems of inventory
management are solved especially when there are no parameters installed with a change
in static patterns of a system.
Factors considered in developing inventory management models
Factors such as time duration, number of stocking points, the nature of the
product, and the nature of the supply process are considered while coming up with
inventory control models.
Time duration
When the selling season for products is short, a single model is preferred while
multiple period models are considered based on a small number of future periods which
are made at the beginning of each period.
Number of stocking points
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It is important that a single stocking point is treated in isolation. Nowadays,
inventories with identical items are kept at more than one location. It is possible to have
horizontal multiplicity, for instance, having several branch warehouses with the
possibilities of having redistribution options.
The nature of the product
The nature of a product is important in identifying and considering the product
characteristics (Takim, 2014). A product can be perishable, consumable, or repairable,
characteristics that should be considered in setting up an inventory management model.
Deterioration of a product is different in different storage places due to the differences in
environmental conditions.
Nature of supply process
It refers to the restrictions imposed on the inbound processes of the supply chain.
Characteristics such as replenishment lead times and maximum or minimum order sizes
are considered under the nature of the supply process. According to Silver (2008), there
are three forms of lead-time. The first form is where the lead-time for each replenishment
is known, the second form is where the replenishment arrives after a random time while
the third form of lead-time affects the time taken for an order to be fulfilled. The order
size and restrictions are considered since the suppliers usually have limited capacity.
Models of inventory management under uncertainty
It is quite a challenging task to obtain realistic input values while coming up with
inventory model parameters. This is due to the number of model dimensions to be
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considered since the more the number of dimensions, the greater the chances of a model
meeting its requirements in a real environment. There are various uncertainties
associated with inventory control. According to Ho (1989), uncertainty can be
categorized as environmental uncertainty and system uncertainty. Environmental
uncertainty entails the uncertainties that go beyond the production process. On the other
hand, system uncertainty is the uncertainty that is related to the production process. In
today’s world, there is the emergence of models of inventory management that take into
account the different forms of uncertainties.
Economic order quantity models (EOQ)
The EOQ model is well known for the fixed order size inventory models. The
basic EOQ model determines the optimal order size. Additionally, it reduces the sum of
carrying costs and ordering costs. Various researches have been made on the basis of
determining the model inputs in the EPQ model. Examples of such model input
parameters are ordered quantity and holding costs among others.
Economic production quantity models (EPQ)
The EPQ model regulates the quantity that a company can order and also reduces
the total inventory costs. According to Lee and Yao (1998), characteristics such as
demand quantity and production per day have been discussed as fuzzy input parameters
in the EPQ model. Additionally, Lee and Yao (1998), considers the production inventory
model in which the product quantity is a fuzzy number. The different researches done to
broaden the scope of the EOQ models found that there were optimal solutions by using
Graded Mean Integration Representation methods. As a result, Lee and Yao were able to
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relate the demand quantity and production quantity per day in their model (Lee & Yao,
1998).
Joint economic lot-sizing models (JELS)
The JELS model is a class of inventory models that address the issue of inventory
coordination between the buyer and a seller. This model aims at developing a jointly
coordinated buyer-seller inventory strategy. While extending the model of Dolan, Lam
and Wong (1996), applied fuzzy mathematical programming to solve the joint economic
lot size problem with multiple price breaks. Additionally, Yang presented a stylized
model that could be used to find the optimal strategy for integrated vendor-buyer
inventory model, (Yang, 2007).
Single-period models
The single-period model determines the order quantity while reducing the
underage and overage costs. A good example of single-period models is the newsvendor
model.
Multi-period models
The model involves stock leftovers from previous periods, unlike the single-
period models. The optimal choice of order quantities is complicated in multi-period
models.
In conclusion, the efficiency of inventory management presents a major concern
to businesses. This section has presented a literature survey on models of inventory
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control and the uncertainty they address. Most of the models discussed addressed one
type of uncertainty while considering fuzzy variables such as demand and the cost of
acquisition. The existence of these models suggests that the fuzzy set of the theory is an
appropriate method that can suppose a great advance in inventory management.
Techniques involved in Inventory management
There are various techniques and practices that can be incorporated into inventory
management. This paper discusses the different techniques involved in inventory
management while discussing their pros and cons. Furthermore, this paper explains the
best practices that make inventory management practices.
Bulk shipments are an inventory technique that involves the buying of goods and
shipping them in bulk (Yusuf, 2003). This technique believes that it is quite cheaper to
engage in bulk shipping. This technique can be applied to goods with high customer
demand. However, the method requires an extra cost for warehousing the inventory. Bulk
shipment is advantageous since it has high chances of profitability, lower shipping costs
due to fewer shipments, and it works well with products that have predictable demand.
On the contrary, bulk shipment accrues the highest capital risks and also has increased
costs in terms of storage of the inventory.
ABC inventory management is another technique used in inventory management.
The technique is places goods according to their order of importance (Takim, 2014). The
category A products are the most valuable while category C products are considered least
valuable. The method is advantageous since it allows for better resource allocation, better
time management; it fosters strategic pricing and enables accurate inventory
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optimization. On the contrary, ABC inventory management requires time and human
resources, ignores new trending products, and also conflicts with some inventory
strategies.
Cycle counting is another inventory management technique that involves the
counting of small amounts of inventory on specific days without doing an entire manual
stock-taking (Yusuf, 2003). This method avails the needs of customers getting what they
want when they want it, while the inventory holding costs are kept as low as possible.
This method is advantageous since it provides minimal disruptions to operations, it is
cost-efficient, and keeps the inventory holding costs low. However, the method may not
account for seasonality and it is less comprehensive than engaging in a full stock-take
process.
Backordering is a technique where a company receives orders and receives
payments for out-of-stock products (Takim, 2014). This technique provides flexibility to
the business, increases sales, and cash flow, and lowers the holding costs. However, the
method may provide longer fulfillment times and a higher risk of customer
dissatisfaction.
Consignment is a method where a wholesaler provides stock to retailer though
retains the ownership until when the product is sold (Takim, 2014). Selling on
consignment requires a high demand of uncertainty and confidence between the
wholesaler and the retailer. Selling on consignments is beneficial since it provides
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customers with products without capital, the unsold goods can be returned at no cost, and
also decreases lag time when restocking.
Drop-shipping and cross-docking is another inventory management technique that
eliminates the cost of holding inventory altogether. Drop-shipping involves the making of
agreements on the transfer of customer orders details to the manufacturer. On the other
hand, cross-docking involves the unloading of materials from a railroad car or a semi-
trailer truck directly to an outbound truck (Takim, 2014).
Best Practices in Inventory Management best practices
Inventory management requires best practices which can be achieved through
continuous improvement. By starting with your own data, large amounts of data used can
be leveraged to ensure that they are cost-prohibitive for the smaller organizations.
Inventory management software can be used for this case to easily create single-source
truth and bring about benefits from crowd-sourced learning which are built into solutions.
Data-informed decisions help drive results that can improve a company.
Inventory turnover can be maximized is important while considering the number
of times that specific goods have been sold and re-ordered (Yusuf, 2003). This move
increases profits by identifying the re-ordering points hence reduces holding costs. It is
necessary to learn the ABC inventory management in order to maximize turnover.
The demands can then be forecasted. It has become hard to predict factors such as
seasonality which have made it quite challenging to predict future growth. It is, therefore,
necessary to automate everything to improve efficiency and lower human dependencies.
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Automating the workflow reduces manual labor and at the same time increasing accuracy
and productivity (Takim, 2014).
It is also important to track batch and expiry dates since they avoid instances of
inventory spoilage, identifies and prioritizes the batches to be sold first, and also removes
the specific batches in cases where the product is recalled (Yusuf, 2003). Additionally,
the first item received in the inventory should also be the first to leave. This highly
applies when commodities being sold are perishable.
Pipeline inventory should be kept flowing to ensure that the business does not run
out of stock. Inventories should also be decoupled to provide a safety net to mitigate the
risks. Pipeline and decoupled inventories are important since they help a business to
strike the right balance between risk and cost. This ensures that there is a balance
maintained for effective inventory management and sustained growth (Yusuf, 2003).
Finally, inventory kitting is also important as another practice for inventory management.
Inventory kitting increases average order values, offers convenience and flexibility to the
customer, keeps holding and shipping costs down, and tracks and maintains stock levels
down.
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Introduction
The purpose of this section is to explore the synergy and motivation of Christian
perspectives on the implications between organizational practices such as management,
consumers and employees. It will apply the motifs of the creation-fall-redemption-
consummation framework/ Genesis model.
The interpretation of the scriptures and mostly the creation narratives comprise of
significant collects and discussions over the relationship of faith, science, and the world
view. The Genesis model is also known as the creation-fall-redemption-consummation
framework is a biblical framework that systematically identifies with the story of God’s
creation and the purpose of creation. As the name suggests, this framework consists of
four steps which are creation, fall, redemption, and consummation. Creation is the sole
being of what God meant it to be. God intended the Earth to be full of peace the kind of
which would work for his own intentions. The world was made for the flouring of
human beings where they would live in joy and prosperity. The fall represents the tragic
intrusion of sin in the world which consumed everything good that God created. Here, the
cause was Adam and Even who upon eating the forbidden fruit in the Garden of Eden,
did against the wish of God. Their actions affect us too, them being the representations or
the source of humankind. The rebellion would then lead to physical and spiritual death
we encounter today. The redemption comes from the mercies of God in his promise to
redeem his fallen ‘image’; humankind, through the grace of his son Jesus Christ. It also
involves the restoration of the whole world and to renew it. According to the scriptures,
God will purge this world once and for all to judge sin and evil and eventually usher
righteousness and peace. The final stage, consummation is whereby God will fulfill his
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magnificent purpose to gather his people forever and live with them in the more than
restored world, the heavens.
This framework/philosophy is based on various assumptions just like any other
philosophy that tends to explain the various norms and occurrences of different situations
in human life. First, there are few questions worth considering 1) does the science of
motivation relate to the scriptures? If this science is only evident in the Bible, then the
only literal material necessary would be the Bible while if it is only located in humanity,
then the use of the Bible is limited. According to the philosophy, humankind was created
with certain functionalities and purposes intended for him while using the structures and
other purposes with the freedom to act towards God’s obedience or obedience to another
‘intruder’; Satan (Porter and Vander Veen, 2011). The origin of humankind, Adam and
Eve, chose the latter which led to the misdirection of his purposeful structures from his
glory. In order to get or repossess these benefits, we have to walk in the newness of life
which is discipleship. As such discipleship means joy and restoration.
Maslow for example, offers the human kind with cheap grace where he argues
that “salvation is a by-product of self-actualizing work and self-actualizing duty
(Maslow, 1998, p.9). He then argues that this salvation emanates from hard work and
total commitment towards doing and performing a good job that duty and the fate that
God created us with, calls us to do. The educational materials do not offer this grace but
exemplify materialistic slavery disguised as freedom. According to Porter and Vander
Veen, (2011), humankind strives towards the needs of achievement, an affiliation of
power without a properly defined end. According to the framework, the need for
achievement should be directed towards sacrificing oneself in order to promote the
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bringing of the kingdom of God he wishes for us at the very end of life of the world.
Additionally, the need for power and novelty should be modeled and channeled towards
achieving and pursuing the unique purpose of God through the use of the special gifts
that God gave us.
In relation to the Genesis model/philosophy, the human kind lives between the
redemption and consummation which according to the scriptures is between Jesus
Christ’s death and resurrection and his return. This means that we should imitators of
Christ, as he did in the scriptures, by mourning, being meek and poor in spirit as the
scriptures recommend in order to attain this redemption. But, in relation to this, how can
we tell the consumers that we are unhappy, devoid of comfort and joy when undertaking
organizational duties? This philosophy tends to add more context of consumer
motivation: all theories of motivation are thought to be reflections of God’s creation and
function for humankind; to strive for meaningful ends that draw us closer to the
restoration and redemption of humankind.
In terms of the previous discussion of motivation, the classical perspective of
management assumes that employees are usually motivated thy economic conditions such
as the fulfillment of needs, rewards, and remunerations, self-actualization among others.
This applies too to the management, where they will conduct strategic scientific studies
and interventions in order to facilitate productivity and increase profits. The behavioral
management perspective, on the other hand, tends to argue that employees primarily
respond to the social contexts of the workplace.
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Theorists such as Abraham Maslow and Douglas McGregor are good
representatives of this perception through their theories of Maslow’s hierarchy of needs
and the Theory X and Theory Y model by the latter. Another form and perspective is the
quantitative perception which does not integrate motivation in its perceptions but puts
across some assumptions of transformative input and outputs and that managerial
behavior developed on a wide range of varied elements (Gregory & Griffin, 1998).
Arguably human beings tend to incline towards the behavioral perspective due to
its strong foundation of motivation it; there are different mechanisms of motivation
restoration, reinforcement, process perspectives, and content perspectives. These are well
demonstrated by the theories of Maslow, McClelland, McGregor, and Hertzberg. Ideally,
these theories view religion as a manifestation of culture created by humans in order to
justify their need for safe power-seeking. This presents a standpoint between the humans
and the Genesis model since culture is a human attribute that develops religion and other
idealities in response to God’s Word in creation. This means that the goodness of human
kind, as well as that of these theories and others, emanate from Jesus Christ. This means
that in a Christian perspective, the organizational management ought to be realistic and
receptive to the ideas that there will be employees who fit in different categories, for
example, some in Theory X, some in theory Y, some will be in both and some will tend
to waver between them depending on their life experience since all creation experiences
sin and its effects. Everyone is therefore knowingly or unknowingly is trying to seek
redemption of God.
This calls for questions like, what is the result of Christian motivation? since we
cannot understand when we are pleasing or displeasing God. Human suffering might be
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one of these just as when organizations use profits to indicate o the meeting of some
wants.
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Outline
I. Factors considered in developing inventory management models
Factors such as time duration, number of stocking points, the nature of the product, and the
nature of the supply process are considered while coming up with inventory control models.
II. Time duration
When the selling season for products is short, a single model is preferred while multiple period
models are considered based on a small number of future periods which are made at the
beginning of each period.
III. Number of stocking points
It is important that a single stocking point is treated in isolation. Nowadays, inventories with
identical items are kept at more than one location. It is possible to have horizontal multiplicity,
for instance, having several branch warehouses with the possibilities of having redistribution
options.
IV. The nature of the product
The nature of a product is important in identifying and considering the product characteristics
(Takim, 2014). A product can be perishable, consumable, or repairable, characteristics that
should be considered in setting up an inventory management model. Deterioration of a product is
different in different storage places due to the differences in environmental conditions.
V. Nature of supply process
It refers to the restrictions imposed on the inbound processes of the supply chain. Characteristics
such as replenishment lead times and maximum or minimum order sizes are considered under the
nature of the supply process. According to Silver (2008), there are three forms of lead-time. The
first form is where the lead-time for each replenishment is known, the second form is where the
replenishment arrives after a random time while the third form of lead-time affects the time taken
for an order to be fulfilled. The order size and restrictions are considered since the suppliers
usually have limited capacity.
VI. Models of inventory management under uncertainty
It is quite a challenging task to obtain realistic input values while coming up with inventory
model parameters. This is due to the number of model dimensions to be considered since the
more the number of dimensions, the greater the chances of a model meeting its requirements in a
real environment. There are various uncertainties associated with inventory control. According
to Ho (1989), uncertainty can be categorized as environmental uncertainty and system
uncertainty. Environmental uncertainty entails the uncertainties that go beyond the production
process. On the other hand, system uncertainty is the uncertainty that is related to the production
process. In today’s world, there is the emergence of models of inventory management that take
into account the different forms of uncertainties.
VII. Economic order quantity models (EOQ)
The EOQ model is well known for the fixed order size inventory models. The basic EOQ model
determines the optimal order size. Additionally, it reduces the sum of carrying costs and ordering
costs. Various researches have been made on the basis of determining the model inputs in the
EPQ model. Examples of such model input parameters are ordered quantity and holding costs
among others.
VIII. Economic production quantity models (EPQ)
The EPQ model regulates the quantity that a company can order and also reduces the total
inventory costs. According to Lee and Yao (1998), characteristics such as demand quantity and
production per day have been discussed as fuzzy input parameters in the EPQ model.
Additionally, Lee and Yao (1998), considers the production inventory model in which the
product quantity is a fuzzy number. The different researches done to broaden the scope of the
EOQ models found that there were optimal solutions by using Graded Mean Integration
Representation methods. As a result, Lee and Yao were able to relate the demand quantity and
production quantity per day in their model (Lee & Yao, 1998).
IX. Joint economic lot-sizing models (JELS)
The JELS model is a class of inventory models that address the issue of inventory coordination
between the buyer and a seller. This model aims at developing a jointly coordinated buyer-seller
inventory strategy. While extending the model of Dolan, Lam and Wong (1996), applied fuzzy
mathematical programming to solve the joint economic lot size problem with multiple price
breaks. Additionally, Yang presented a stylized model that could b used to find the optimal
strategy for integrated vendor-buyer inventory model, (Yang, 2007).
X. Single-period models
The single-period model determines the order quantity while reducing the underage and overage
costs. A good example of single-period models is the newsvendor model.
XI. Multi-period models
The model involves stock leftovers from previous periods, unlike the single-period models. The
optimal choice of order quantities is complicated in multi-period models.
In conclusion, the efficiency of inventory management presents a major concern to
businesses. This section has presented a literature survey on models of inventory control and the
uncertainty they address. Most of the models discussed addressed one type of uncertainty while
considering fuzzy variables such as demand and the cost of acquisition. The existence of these
models suggests that the fuzzy set of the theory is an appropriate method that can suppose a great
advance in inventory management.
XII. Techniques involved in Inventory management
There are various techniques and practices that can be incorporated into inventory management.
This paper discusses the different techniques involved in inventory management while
discussing their pros and cons. Furthermore, this paper explains the best practices that make
inventory management practices.
Drop-shipping and cross-docking is another inventory management technique that eliminates the
cost of holding inventory altogether. Drop-shipping involves the making of agreements on the
transfer of customer orders details to the manufacturer. On the other hand, cross-docking
involves the unloading of materials from a railroad car or a semi-trailer truck directly to an
outbound truck (Takim, 2014).
XIII. Best Practices in Inventory Management best practices
Inventory management requires best practices which can be achieved through continuous
improvement. By starting with your own data, large amounts of data used can be leveraged to
ensure that they are cost-prohibitive for the smaller organizations. Inventory management
software can be used for this case to easily create single-source truth and bring about benefits
from crowd-sourced learning which are built into solutions. Data-informed decisions help drive
results that can improve a company.
