The aim of a business is to maintain stock at optimum levels. (Not minimum, but optimum!) This is determined by a range of factors:
- The image of the store
Often not considered, especially by the accountants, but sometimes the right quantity might be very ‘minimalist’ – simply because that is the store image, It is not always about productivity.
- The expectations of the customers
This is closely related to store image.
- Cash resources/the line of credit available
Need I say more? Except that if this becomes a constraint or issue that prevents you from executing your strategy and your brand promise, then it must fixed quickly.
- Product features
Some products store well and others don’t. The obvious ‘features’ that apply is fashion and perishable items, but it is very hard to predict the peak a faddish seller, so it is also particularly difficult to select order quantities.
And it goes without saying that retailers are also constrained by:
- Space available
- Lead times
- Supplier policies