1. Purchase Planning and Inventory Management, pp 324-337
Entrepreneurship
Mr. Bernstein
Purchase Planning and Inventory Management, pp
May 2017

2. Entrepreneurship Mr. Bernstein
Planning Purchases
What will you buy?
How much will you hold in stock?
How will you time purchases?
Who will you buy from?
How will you get the best price?
Planning Purchases is a primary concern for retail and manufacturing businesses

3. Entrepreneurship Mr. Bernstein
Planning
Merchandise Plan
Know Inventory
Estimated Sales
Planned Purchases
Planning avoids overspending!

4. Entrepreneurship Mr. Bernstein
Researching
Compare Vendors
Production Capabilities
Shipping Times
Past Experiences
Minimum Orders
Special Services
Discounts – Loyalty, Volume
Payment Arrangements (ie 2/10 net 30)
How many vendors should you use?

5. Entrepreneurship Mr. Bernstein
Evaluating
Sales Rates
Customer Feedback
Evaluate Vendors as well as Products

6. Entrepreneurship Mr. Bernstein
Inventory Management Systems
What is the best way for your business to keep track of its inventory?

7. Entrepreneurship Mr. Bernstein
Inventory Management Systems
Perpetual Inventory
Information typically collected through POS (Point of Sale) system
Allows employees to see product availability at all times
Manual Data Collection
Sales and shipment information collected continually, or periodically (aka Physical Inventory)
No upfront or ongoing costs
Opportunity for errors
Can use a combination of Perpetual and Physical Methods
Kanban or Just-in-Time System

8. Entrepreneurship Mr. Bernstein
Inventory Shrinkage
Theft (employees) - 49%
Shoplifting - 32%
Administrative Error – 15%
Vendor Fraud – 5%
Prevention
Education – test on store procedures
Planning – plan for dealing with dishonest customers, employees or vendors
Security – pre-employment testing