What Is Inventory Vs. Inventory?

Sunil Chopra and Peter Mendl argue that inventory is one of the drivers of the supply chain performance and that it has a great impact as the other drivers, such as facilities and transportation which are the same as inventory being ‘Logistical Drivers’. Analyzing the position of inventory in the supply chain, certain factors of the inventory will be taken into account such as the responsiveness, economies of scale, the different variations of inventory, how other factors will affect the inventory, and transportation, which as stated before it is one of the drivers in the supply chain, Vs. inventory. All these concepts of inventory will be analyzed in the supermarkets domain and how crucial is inventory for the supply chain performance.

Inventory

Raw materials are inventory items, which are going to be used by the manufacturer in the work process to create components, or for finished goods. These inventory items may be goods or obtained materials that the organisation has produced or extracted. These items may have also been purchased from outside of the company. Generally, these types of items are chemicals, paper, wood, paint, steel, food items etc. Work in process (WIP) includes all the components, assemblies and materials that are being processed or which are waiting to be processed. This inventory contains all materials, including raw materials which are going to be processed into a finished good which awaits approval. A finished good is a finalized product which is ready to be sold to customers. Consequently, a finished good inventory is a stock of finalized products. As mentioned before, these products have been through an inspection after the work in process and after approval, have been transferred to the FGs inventory. After this step, the finished goods can then be sold to wholesalers, retailers or directly to the customers. In the supermarket supply chain, all of the supermarkets such as Asda, Tesco, Waitrose etc. all have inventories mostly of finished goods, as they do not only sell the products of other manufacturers, but they