Inventory Management

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Inventory Management

Inventory Management Issues Faced by Small Pizza Restaurant

Inventory management is an important element in managing business. This is, in fact, to have a certain amount of items - produced by the company and for sale - to meet immediate customer orders. When the company is unable to meet customer demand through the stock before it, is called out of stock (Muller, 2003). From a practical standpoint, the difficulties and issues faced by small businesses in managing inventory lies in the following equation: sufficient quantities to meet orders from customers, without going overboard to avoid storage costs that can weigh heavily in the balance and generate additional expenditure for the company such as:

The acquisition cost (more than the amount of goods purchased is important).

The storage cost (rental of premises sometimes with specific characteristics such as refrigerated rooms for perishable products, resulting in a surplus fees to ensure good storage conditions).

The cost of depreciation (when the goods are stored for too long).

In case of small pizza restaurant there are problems in the management and inventory management, and the differences between physical inventory and accounting, to count the number of stocks available the reality is that the final number does not match you have registered. In most cases, to adjust these problems, book inventories are adjusted to physical inventory thus making the numbers are equal, but this short term effect only lasts until you perform the following physical count, where the situation is repeated (Dollar, et.al, 1980). To reduce the difference between the physical inventory and the accounting or registered, restaurant must ensure that it entered into the accounting system is actually received in each of the deliveries made by suppliers. Also, it is recommended that periodic counts and review the stored products to determine what is causing causes. When the cause is detected, the intensity of periodic counts can be decreased until it can have confidence in the inventory (Silver, et.al, 1998).

Benefits of using a Fixed Order Quantity against the Fixed Period System

Inventory Management provides for the organization to monitor their actual condition. The necessity of organization of inventory control due to the increase in costs in the event the actual size of the stock beyond the stipulated norms of supply. Inventory control and order generation can be carried out periodically, according to one of these systems: The system of operational control - after a certain period of time to make operational decisions, "order" or "not to order", if ordered, the quantity of items.

Implementing the system with a fixed order quantity at small pizza restaurant will help the management for the periodic inspection of the actual level of stock (with a threshold level of reserves). The actual stock level is checked at regular intervals. The decision to order a constant volume of the goods will be based on the provision that the stock of dough at the time of testing is less than or equal to the established threshold level of inventory. Otherwise, the ...