Research on Inventory Management in A Trading Company in
Chinese Duty Free Zone - Based on SC Company
Abstract
Inventory management is managing inventory of one enterprise. Inventory is looked as a
vital assert in the company, on one side, holding a few stocks benefits company's daily
process moving on successfully, on the other side, it has flexibility for both of manufacture
and sales which adapts irregular changes from external market to avoid missing business
opportunities. But holding inventory has to occupy the cash. It is not disregardful that
inventory management deeply influences the utility of company fund and the efficiency of
capital running. This is essential for a trading company. Having considered unique policies in
domestic DFZ (Duty Free Zone), the company in that place will increase its stocks
unconsciously. So inventory management improvement becomes an important issue.
In this article, the writer uses case study method, with his work experience, to analyze
and summarize current inventory management situation and reason of SC Company who
locates in a DFZ and provide some advises of approach of improvement. First of all, the
article introduces theory of traditional inventory management and theory based on supply
chain and compares each other. Meanwhile, the article explains how to approach and where
above two methods can be adopted. The writer also lists latest study results in domestic and
overseas. Secondly, depending on historic stock data of SC Company, after analysis, affected
factors and reasons were found out. Furthermore, based on factors and reasons found, with SC
Company actual operation status, the writer raises joint inventory management to solve the
problem. Whether it is feasible, how to start, how to implement and what it could be
concerned are discussed. Then better inventory management for SC Company is further
researched. At the last of the article, the conclusion was drawn with the limit between
studying.
Through this article, it is hoped by the writer to provide the means of use for reference to
similar companies.
Keywords: inventory: inventory management; Activity Based Classification;
Zero Inventory Management; joint inventory management
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