Stock Management - Retail Supply Chain

Retail Supply Chain

Stock management in the retail supply chain follows the following sequence:

  1. Request for new stock from stores to head office
  2. Head office issues purchase orders to the vendor
  3. Vendor ships the goods
  4. Warehouse receives the goods
  5. Warehouse stocks and distributes to the stores
  6. Stores receive the goods
  7. Goods are sold to customers at the stores

The management of the inventory in the supply chain involves managing the physical quantities as well as the costing of the goods as it flows through the supply chain.

In managing the cost prices of the goods throughout the supply chain, several costing methods are employed:

  1. Retail method
  2. Weighted Average Price method
  3. FIFO (First In First Out) method
  4. LIFO (Last In First Out) method
  5. LPP (Last Purchase Price) method
  6. BNM (Bottle neck method)

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