ROLE OF SUPPLY CHAIN IN INVENTORY SYSTEM

Abstract

In the present era, where there is a competitive world in the area of business it is very important to control various costs to sustain in the market. And the most importantly customer is to be considered as the most important part of any business. In such fast moving and rapid environment, inventory management plays an important role to make a control over the financial statement of the organization. Inventory involves in the whole process cycle of the organization as it starts with the shop floor to the top level management commitment. In this we will discuss and analyze some of the parameters which directly show the impact of inventory management to the financial statement of the form. This research is based on the fact that intensive competition, higher specialization and companies being focused on core competencies have lead to an increased level of outsourcing, which implies suppliers being included in partnerships. This development can be explained from transaction costs theory and resource-based theory. The chain of suppliers needs to co-operate, and the literature on qualitative supply chain management. In the supply chain a customer refills inventory with replenishments given to the supplier in terms of (un)certain order sizes with (un)certain time intervals. The customer on the other hand is cost optimizing the replenishment orders, which depend on the demand given by his customers. Hence, the ordering process optimized by the customer aspects the performance of the supplier.