Wal-Mart’s inventory management system is a highly complex electronic concept. This system uses technology in order to achieve the fastest up to date inventory system available. First inventory amounts are calculated and entered into a database which is the basis for the complex inventory management system. Every product that is distributed through Wal-Mart uses a universal product code otherwise known as a UPC tag or bar code. Contained in the UPC tag is certain information that will reveal characteristics of that particular product such as price, department, and what that product is. When the item is brought to the check out the item UPC code is scanned and immediately the inventory level is reduced by however many units of that product were purchased. Now, when inventory begins to diminish and reaches a certain number an alert is sent to the supplier as well as members of the management team issuing a restock on that particular item before a stock out occurs. Suppliers can check current inventories through Wal-Mart’s inventory database without having to even leave the office.
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ReplyDeleteWal-Mart Stores INC. is an American public corporation that runs a chain of large discount department stores. According to the Fortune Global 500, it is the world’s largest public corporation by revenue. The company was founded by a business man, Sam Walton in 1962; it was incorporated on Halloween of 1969. Wal-Mart is the largest private employer and also, which is surprising to me the largest grocery retailer in the United States. Wal-Mart further more than the shores of the United States, as it operates in 15 other countries. A few are Mexico, UK, Japan, India, Argentina, Brazil, Canada, and Puerto Rico.
ReplyDeleteIn 2004 through 2006, Wal-Mart's inventories were out of control. Inventory growth escalated far beyond their normal levels, this matched sales levels at 92%. Wal-Mart DeLoaded inventories and introduced other programs to reduce their inventories. Since that time, the decrease in inventory growth vs sales cost has substantially increased Wal-Mart's free cash flows. In 2007, their inventory growth was just 12% of their sales growth. In turn, cash flow for the 2007 year increased by 25%.
ReplyDeleteThis circumstance represents how a decrease in inventory can largely increase a companies cash flows.
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