Customer Service
High inventory levels speed delivery and improve on-time delivery. Ofcourse, it reduces the potential of stock outs and backorders, which are key concerns of wholesalers and retailers.
Stockouts is termed as a situation when an item typically stocked isn't available to satisfy a demand, the moment it occurs.
Backorder is a customer's order which is not fulfilled. And customer may wait for one backorder, but next time that particular customer may take its business somewhere else, resulting in a potential loss of credibility of business, and sales ofcourse.
Ordering and Setup Cost
Each time a company places an order to its vendors, ordering costs incur. For instance, when we place an order, we have to go though following process.
Financial Charges:
(Online Transaction Charges, Bank Instrument Charges)
Postal/Communication Cost:
(In case of unavailability of advanced internet technologies at both sides to speed up and ease communication.
Transportation Cost:
Moving stocks from one place to another require transportation and labor and this is quite the same, directly proportionally to the number of orders placed.
More Discounts Enjoyed
Some professionals feel that purchasing bulk inventory will put them in a competitive position to bargain on discounts offered from vendors.And high inventory costs can be marginalized through bargaining for more discounts while purchasing.
Reduced Payments to Suppliers
If a company learns that its vendors are going to increase prices for certain items in near future. It can place a bulk order to reduce the future payments to its suppliers.
High inventory levels speed delivery and improve on-time delivery. Ofcourse, it reduces the potential of stock outs and backorders, which are key concerns of wholesalers and retailers.
Stockouts is termed as a situation when an item typically stocked isn't available to satisfy a demand, the moment it occurs.
Backorder is a customer's order which is not fulfilled. And customer may wait for one backorder, but next time that particular customer may take its business somewhere else, resulting in a potential loss of credibility of business, and sales ofcourse.
Ordering and Setup Cost
Each time a company places an order to its vendors, ordering costs incur. For instance, when we place an order, we have to go though following process.
Financial Charges:
(Online Transaction Charges, Bank Instrument Charges)
Postal/Communication Cost:
(In case of unavailability of advanced internet technologies at both sides to speed up and ease communication.
Transportation Cost:
Moving stocks from one place to another require transportation and labor and this is quite the same, directly proportionally to the number of orders placed.
More Discounts Enjoyed
Some professionals feel that purchasing bulk inventory will put them in a competitive position to bargain on discounts offered from vendors.And high inventory costs can be marginalized through bargaining for more discounts while purchasing.
Reduced Payments to Suppliers
If a company learns that its vendors are going to increase prices for certain items in near future. It can place a bulk order to reduce the future payments to its suppliers.
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