merchandising EOPA Study Guide

Role of Distribution/channel management physical distribution is the group of activities associated with the supply of finished product from the production line to the consumers. It accounts for half of the marketing budget. activities are often the focus of process improvement and cost-saving initiatives in many companies. key functions within the physical distribution system are: Customer service Order processing Inventory control Transportation and logistics Packaging and materials

Distribution/Channel management The role of distribution to ensure continuity of the flow of goods consists of: [5] • achieving optimal correlation and synchronization between supply and demand - by providing customers the products when (and where) they want; • changing of the appearance or composition of the supply to make it more attractive to users through operations of bottling, packaging, packaging, etc.; • changing the physical possession of goods - their ownership transfer from manufacturers and distributors to consumers; • moving the product to place of demand - through rational organization of the physical flow of goods; • minimizing costs, making at the disposal of the consumer the desired product

Channel management/distribution Channel members are: producer, wholesaler, agent, broker, retailer and final consumer Cost increase the more channel members in the pathway. Channel members are also called middle men

Advantages & disadvantages of types of inventory control systems Periodic Inventory LIFO Method FIFO Method HIFO Method FISH Situation Just In Case (JIC) Method Just In Time (JIT) Method Perpetual Inventory Systems Supply and Demand Inventory Turnover Go to power point on inventory

shrinkage Causes of inventory shrinkage: Reducing inventory shrinkage: Employees theft Placement-Product placement within the retail location is an important method used to reduce the loss of the most valuable items.  Inaccuracies: counting and paperwork Obsolete- no longer have value Damage Reducing inventory shrinkage: Educate and train employees properly. Run training and loss-prevention programs which clearly discuss the implications of theft with employees, such as limited pay increases, fewer opportunities for promotion, and layoffs due to the company’s financial instability Secure your storeroom. The easiest way to reduce the risk of employee theft is to restrict access to your inventory. Only those employees directly involved with handling inventory should have access to inventory areas. If you have some goods that are particularly valuable, consider further restricting access to the areas where these are kept.[4]

Inventory shrinkage Tighten your receiving practices. The receiving area of a warehouse is where a large amount of inventory theft takes place. Employees might mark shipments as short or spoiled when they are not and claim the good for themselves. You can prevent this by requiring an inspection of spoiled or damaged goods before they are thrown out. You should also have an employee that works outside of receiving perform these inspections, along with a recount of the items received Install surveillance cameras. Monitor valuables closely Separate duties among more than one employee. Don’t allow the same person to handle inventory management, processing of receipts, and recording of receipts. 

purchasing The activity of acquiring goods or services to accomplish the goals of an organization. The major objectives of purchasing are to (1) maintain the quality and value of a company's products, (2) minimize cash tied-up in inventory, (3) maintain the flow of inputs to maintain the flow of outputs, and (4) strengthen the organization's competitive position. Purchasing may also involve (a) development and review of the product specifications, (b) receipt and processing of requisitions, (c) advertising for bids, (d) bid evaluation, (e) award of supply contracts, (f) inspection of good received, and (g) their appropriate storage and r