Distributor retailer integrated inventory model (in supply chain) Essay - 1

Distributor retailer integrated inventory model (in supply chain) - Essay Example Business has become very competitive in the present world. Customers are now exposed to more information regarding the product and this allows them to select the best product in the market. Globalization has made business to be competitive outside the region of operation. It is very important that every organization determines suitable method to make the product and service to the people at lowest price. Company will be able to provide products under reduced cost only if the operating cost of the organization is reduced. In the business world every amount that is spent on the product is countable, by reducing the cost of operation the firm will be able to reduce the price of the product and this will increase the competitive advantage of the organization. Supply chain management is now being identified as an important factor for the effective functioning of an organization. Supply chain management provides large opportunity for reducing the cost of operation and to ensure that the firm functions effectively. Supply chain management covers all the process in the production of a product or service starting from the collection of raw materials to the delivery of the product. Effective supply chain management depends on several factors. With the increase in sequences and participants in the supply chain the complexity of the chain increases. Inventory management is an important aspect of the supply chain management. The main focus of inventory management is to determine the activities of inventory like determining the amount of inventory that a company would require to meet the demand of the customer. Proper inventory control enhances the firm to have the optimum amount of inventory to meet the demands of the customer. Low inventories may result in the organization having deficient inventories and will have to face a shortage of inventories. Most of the companies in the past used the