lab2

Write a summary of reading that include:

1)Advantages of inventory management system

2)Problems faced by Wal-Mart in using the inventory management system

1)Inventory is necessary for many businesses including retail and manufacturing facilities. Maintaining appropriate inventory levels is crucial, as too much inventory can be costly. An inventory management system helps to control and balance the flow of incoming and outgoing merchandise. For most businesses, a strong inventory management system is advantageous for several reasons.

Supply and Demand 

Having an adequate supply of a particular product to meet customer demand is crucial to both sales increases and customer service. If a customer comes to a business to purchase a product and it is out of stock, the sale is lost forever and the customer will probably go to a competitor to find what they need. A good inventory management system, whether computerized or manual, will identify sales trends and prepare for customer needs.

Streamline Operations

Manufacturing facilities should always maintain proper inventory of the supplies necessary to produce their products. If one component is missing from the inventory, the whole production process is interrupted. Streamlined operations are an important benefit of an effective inventory management system.

Lead Time Adjustments

Inventory management systems are important for determining when to order certain items, especially for products with varying lead times. Some products take longer to receive from the manufacturer than others, and it’s important to have an inventory management system that accounts for lead time. If for example, a grocery store was going to have a sale on hotdogs, relish and mustard, but the hotdogs took longer than three days to receive while the condiments took five days, the inventory management system would need to ensure that all items were in stock in time for the sale.

Reduce Liabilities

Another significant advantage to an inventory management system is it reduces the liabilities and loss created by overstock. Similar to monitoring supply and demand, a good inventory management system will notice declines in sales or identify one-time occurrences to prevent over-ordering certain products. For instance, if a clothing store was having a sale on a certain style of jeans, it may order additional stock to meet customer demands. The inventory management system should take the sale into account before ordering more of the jeans based on the spike in sales. Otherwise, they store may have to offer even deeper discounts to get rid of the excess inventory.

 

 

 

2)There are both advantages and disadvantages in Joint Venture or acquisition of

local businesses. These arrangements helped Wal-Mart understand a new market

and avoid problems with local distributors. Partnerships are also the best sources of

information on local sales trends and retailers’ performance data. Moreover, these

strategies facilitate market presence and allow quicker market penetration. However,

the acquisition of local chain retailers in some countries can make people feel that

they will occupy by the foreigner. This also effect in purchasing banned from local

customers. Especially, in the country that people are nationalism such as Germany.

The acquisition of Wertkauf and Interspar mislead the establishment in Germany that

soon after caused huge number of problems to Wal-Mart.

quick solutions. The examples of these problems are supply chain, strong local and

foreign competition, and lots of government’s red tape. Everyone knows that rules

and regulations of Communist countries are very strict and limited. The Communist

government has boxed foreign retailers into selected countries to limit competition.

Moreover, some selected products are controlled and nominated by local suppliers

only. For instance, liquor and tobacco must be bought locally, and Chinese’s favorite

vegetables have to be bought nearby too.

Reference

(Bianco, A., Zellner, W. (2003). Is Wal-Mart Too Powerful? BusinessWeek, (3852),

p100.)

(Ratail Touch Points: Top 5 benefits of Insight-Driven inventory management)

 

 

 

1>Definition of information system?

2>How information system benefits organisation?

1>An information system - or application landscape is any combination of information technology and people's activities using that technology to support operations, management In a very broad sense, the term information system is frequently used to refer to the interaction between people, algorithmic processes, data and technology. In this sense, the term is used to refer not only to the information and communication technology an organization uses, but also to the way in which people interact with this technology in support of business processes.

2>The following are benefits of information systems:

• central access
• easy backup
• central distribution of information
• easy record-keeping
• easy tax preparation
• easy customer trait identification

An information system offers a litany of benefits that help to make the process of managing information easier. Central access, easy back up, central distribution of information, easy record keeping, easy tax preparation, as well as easy customer trait identification, are just a few of the benefits offered by an information system. Central access means all organisation members have one point to access all organisationally public information and increases efficiency. Having information in a variety of locations can be cumbersome and cause information to be overlooked. With easy back up, the chances of lost data are decreased and organisational staff will tend to back up more regularly as the system is easy to navigate. Easy record keeping and tax preparation go hand in hand as they both mutually benefit each other. Time is not lost with missing information from poorly kept records, and information is therefore readily available for tax preparation. To receive the greatest benefit overall, it is important to understand that it is an adaptable tool that should progress as your business progresses. Information systems are rarely innovative or 'out of the box' business solutions. They are designed to grow with you and enhance your organisation's information delivery in the process.

Reference:
(http://en.wikipedia.org/wiki/Information_system
Software Engineering for Business Information Systems (sebis). Jan 21, 2009. Retrieved January 14, 2011)
(http://www.blurtit.com/q8104822.html)