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The proposed dissertation's title is: stock shortage at a store during the holiday season.
1.2 Research Question
What are the methodologies to reduce the shortage of stock at stores in a seasonal period?
1.2.1 Research aim
The aim of this research is to identify different strategies and approaches that a business enterprise should adopt to battle the issue of a shortage of stock at the stores in a seasonal period. A shortage of stock, commonly referred to as "stock out", means when a business owner simply runs out of inventory for one or several products. This stock out can happen due to a shortage occurring in any part of the supply chain. It directly affects the business of the retailers and adversely affects their profit margins.
1.3 Objectives and Methodology
To identify the major reasons behind the shortage of stock at stores in the seasonal period.
To determine appropriate techniques or strategies for stock management at a store in a seasonal period.
To evaluate the impact of stock management on the business, especially during seasonal fluctuations.
To give recommendations on improving business strategies for effective stock management.
1.4 Justification of Research
Stock outs are a very common occurrence nowadays. For example, let's assume one is eyeing a particular product, but when he/she goes to buy it, it's no longer available in the store. With technological advancements, the majority of business now takes place on digital platforms. The same thing happens here also; products suddenly become unavailable online. As a result, customers either have to buy substitute products or simply leave that site.
Stock-outs can occur for a number of reasons, such as:
Underestimation of the amount of inventory required
Sudden surge in demand for any particular product.
Supplies got delayed for some reason.
Lack of capital to order new stocks
The experience of stock-outs is a very frustrating experience for both the buyers and the retailers. If any major disruption occurs in any part of the supply chain, it badly affects the business. Especially in the electronics industry, the problem of stock-outs is pretty regular. There are some reasons which are responsible for stock-outs on the retailers' part.
1.5 Dissertation Outline and Summary
One of the major reasons behind stock-outs is disparities between the item counts and records of the items that are stored for future use. This disparity can be caused by 1) human error or manual error, 2) technical glitches, 3) loss of goods due to damage, theft, or misplacing of objects, and 4) all of the reasons above. Warehouse management is a very important part of stock management. Most warehouse storage and distribution depend on a centralised computer system, and any glitch in the system causes discrepancies in item count. Sometimes both manual errors and technical glitches cause errors, such as delays in synchronisation between two systems, discrepancies in the number of items, etc. Stock management is essential for the business and it has a long-lasting impact on both the reputation of the brand and the financial health of the business enterprise. Sometimes, inaccurate forecasts and wrong reporting also cause stock-outs (Gruler, et.al, 2018) Sometimes there is a sudden surge of demand for any particular product and, due to inadequate forecasting, the business owners, especially small and medium-sized business owners, have little to no products stored in the warehouse. When a product becomes popular, it is natural that it will sell readily, but if there is a discrepancy regarding future demand, and there is a surge in demand for that product, the business owners can't meet customer demands. If the business owners, especially the retailers, couldn't anticipate the pattern of demand, it is inevitable that they would lose customers and it would negatively affect their business growth. Business owners make these anticipations based on the data available to them. If this data had any kind of error, then the forecast would be wrong and they would be unable to meet customers' demands. Apart from the loss in sales and revenue due to stock-outs, business owners or retailers often miss opportunities to engage with shoppers, which has the potential to damage the company or brand name. Sometimes errors occur in sales reports due to human error or technical glitches. Business owners now, for most of the time, make business predictions based on these reports. If there is any error in the sales report, then the prediction ought to be incorrect and it is harmful for the business. Retailers often deal with some problems that are not in their hands. For example, retailers can handle the issues with inventory management. But some logistical problems, such as delivery, are not in their hands (Karimi, et.al, 2021) For example, hundreds of thousands of containers containing merchandise are regularly unloaded at the dock, and this is a preliminary step in the supply chain. If any discrepancy occurs at this stage, the retailers can't do anything about it, but they are the ones who face the primary loss. Apart from shipping, there are some problems that nobody could have anticipated. For example, in 2020, when the COVID-19 pandemic hit the world, it disrupted the global supply chain. During this time, many major business organisations declared bankruptcy, making it extremely tough for small and medium-sized business enterprises. For example, according to recent research, 38.8 percent of small businesses worldwide face supply chain disruptions. Sometimes the right shipments arrive at the wrong destinations. There was a lack of employees working at the time. These reasons can disrupt business activities and can reduce profit margins.
This chapter discusses current theories and literature about the concept of stock management, shortages of stocks, the importance of stock management, etc.
2.2 The concept of stock management in stores
According to Riza & Purva the concept of stock management refers to inventory management in stores. In simpler terms, stock management refers to ordering, stocking, tracking, and controlling the inventory to fulfil corporate objectives (Riza & Purva, 2018) But in contrast to this literature, Wang et al suggest that stock management is not only limited to inventory management but also helps to establish customer corporate relationships (Wang, et.al, 2020) This literature also suggests that stock management is one of the most crucial and significant steps in business and controls the whole demand-supply chain. Efficient stock management ensures the supply of raw materials so that the production can run smoothly without any obstruction. Stock management includes every product, from raw materials to finished products. So, it is evident that stock management controls every aspect of business. Stock management is a very important aspect of business, as effective stock management helps to save capital, which can be further invested in other businesses. According to the literature, there are mainly four types of stocks, which are
1) raw materials: stocks which can be readily used for production.
2) Work in Progress: It refers to the unfinished product that is still a part of production.
3) Finished Products: Items that are ready for sale.
4) Consumables: stocks that will be used on a regular basis to keep the production running smoothly and will need to be replenished on a regular basis. For example, fuel is one such stock.
For small and medium-sized businesses, stocks can be managed in two different ways, which are
1) Periodic Stock Management-In this process, inventory valuation is done on its physical property value within a specific interval of time. This management process is very effective for small businesses as the inventory is relatively small and it is much cheaper than the electronic tracking procedures.
2) Perpetual Stock Management: This system mostly includes electronic tracking systems to track the status of the inventory on a regular basis. Though this is a much more expensive process, it gives updated and accurate information on inventory. It reduces the chances of human error and gives accurate information on stock.
Stock control or stock management is the number one priority for business owners, especially for small and medium-sized enterprises. It can assist business owners in improving the condition of their warehouse based on demand and market. Effective stock management helps to provide better services to consumers and also helps to increase the profit margin by giving a clear picture of stock value and market rates.
2.3 The reason for the store's stock shortage
According to the literature Erceg et al, there are several factors that contribute to the store's stock shortage (Erceg, et.al, 2019) The main reasons are
2.3.1 Inefficient inventory control technique
Effective and efficient inventory management helps to supply necessary goods according to customer demand and market conditions. Efficient and adequate inventory management also includes proper disposal of waste, improving the quality of both the products and services provided to customers, cost management, and sustaining profit margin. As a result, it is clear that one of the major causes of store stock shortages is ineffective inventory control techniques. There are often stock-outs happening in the market. As data from Abode show that stock-outs were up 250 percent in October 2021.
2.3.2 Inadequate Forecasting and Ineffective discission Making
Stock out simply means when there is an underestimation of customer demand and the supply is not adequate. According to Basin et al Inefficient inventory management causes underestimation of the demand for a product, and thus the supply can't compete with customer demand (Basin, et.al, 2019) Inadequate inventory management also causes late delivery of products from the suppliers and vendors, and this will result in a low level of reordering. Inadequate inventory management also leads to compromises in the safety standards of the products. The same reason can also cause an underorder. Lack of inventory management skills can lead to poor decision-making and that can cause errors in order estimation. An efficient inventory management system uses some key inputs, such as market forecasts, planned replenishment cycles, etc., to estimate the correct order amount. This same reason can also cause product quality issues, and that's not favourable to the organisation's reputation. It will also cause a high level of return to the manufacturer or supplier, thus worsening the relationship between suppliers and retailers.
2.3.4 Poor Cashflow Management
Even with ineffective and irresponsible inventory management, delays in payment can cause suppliers to refuse to cooperate with the retailers and stop supplying goods. This can also result in a lack of working capital, which can reduce the number of bulk orders as well as the amount of cash flow entering the system (Boakye, et.al, 2021) According to Boakye et al, this can also lead to other issues, such as too much cash being tied to excess inventory. Lack of inventory management techniques also causes false estimations such as errors in market forecasts, which cause scarcity or overflow of products. In the case of product scarcity, either consumers have to be satisfied with substitute products or they simply leave that merchant and buy products where they are available. In this case, the business organisations can lose their loyal customers and it can deliver a huge blow to the organisations' reputation. Overflow often causes huge economic loss.
2.4 Poor leadership Qualities
Poor leadership styles are one of the most prominent problems found in different business enterprises. Lack of leadership often causes bad decision-making that often results in either a lack or an overflow of inventory.
2.4.1 Lack of Communication Skill
Poor leadership skills also often cause a lack of communication between the management and the employees. The employees often don't have a clear understanding of their responsibilities or what they are supposed to do. They often can't communicate the problems they are facing in the business to the senior management. It can also cause misunderstandings about inventory management. In the most critical situations, an ideal leader is expected to find solutions.
2.4.2 Lack of Warehouse Management
Warehouse management is one of the most labour-intensive and critical tasks as it includes shipping, packaging, and managing different products. According to the literature, inadequate leadership often results in warehouse inefficiency, such as limited visibility of goods in the warehouse. Limited visibility of goods in the warehouse causes delays and errors in shipments, and it also makes finding the right shipment in a short time very difficult (Nkuna, et.al, 2018) This upsets the customer experience and gives the company a bad name. Surveys from Abode shows that electronics product has the highest rate of stocking out, followed by Jeweller, apparel, home and garden appliances and pet products.
2.4.3 Ineffective Decision Making
The market space is a very competitive place, and demand is always fluctuating in the market. An ideal leader must acquire the necessary data about the trade and the market and estimate the amount of order accordingly. So, ineffective or even short-sighted decision-making can often result in not fulfilling customers' demands. Keeping too small of an inventory can result in losing a loyal customer base. Moreover, if the demand is low and the inventory is overflowing, the enterprise will be forced to sell goods at a much lower price, which will cause massive losses.
2.4.4 Human or Manual error
Generally, the clerks, or even sometimes the senior officials, are tasked with manual documentation, i.e., managing paperwork, handling back office etc. This process is time-consuming, tedious and often leaves scope for error. If the company's management lacks leadership qualities, a lot of errors can occur in the paperwork, and that can hamper the estimation calculation. In simpler terms, errors in paperwork can cause serious problems in inventory and warehouse management.
2.4.5 Lack of detailed Management plan
Some businesses deal with perishable and fragile goods, and these perishable and fragile products require serious and carefully chalked plans for care, storage, packaging, and shipment. Apart from this, the global supply chain is extremely complex in nature, and for that reason, space in warehouses needs to be managed. Now, warehouse space management is an extremely serious and difficult process, and inadequate leadership is enough to ruin this process.
2.5 The importance of stock management of sources
2.5.1 Performance management
Yerpude & Singhal suggest that inventory management is the nerve of the supply chain (Yerpude & Singhal, 2018) Hence, it is extremely important for the sustenance and growth of the business. Proper inventory management helps to create a balance between supply and demand and satisfies customer demand. For example, different market surveys and literature suggest that effective inventory management puts emphasis on volatile customer demand. It is less risky in nature as it prevents an overflow of inventory. Effective inventory management also ensures financial transparency, which is essential in increasing the productivity of the business organisation. One of the main benefits of stock management is that it ensures visibility of all the products, including both physic and cloud-based products. This process incorporates managing new products as well as managing the old stocks that are being sold. If the management has a compressive view and a clear picture of inventory, they can correctly estimate how much product is needed to satisfy customer demands. This also reduces the cost associated with holding stocks. Effective stock management ensures that the company officials have full knowledge of each and every product. It helps the company efficiently manage the supply chain and also the warehouse space. It also helps to identify who the best seller is and which vendor is underperforming, as well as to evaluate the time to re-order stocks. In this way, it helps to enhance the productivity of the business and efficiently organise the inventory.
220.127.116.11 Issue with disorganised warehouse
One of the main problems that regularly occur is the problem of disorganised warehouses, and only having a clear stock management policy can solve this problem. For example, in an efficient warehouse management system, the best-selling items should be placed on top so that they are easily accessible. The products can also be arranged according to their brand or seasonality, and they can be re-arranged easily. This is effective in meeting the customer's demands within a shorter span of time. This will increase the rate of customer satisfaction and will help to build a positive image for the company or the business enterprise. In a fiercely competitive space, customer satisfaction gives the company an edge and helps to sustain the loyal customer base. This is also effective in attracting new customers. Inventory management also helps to sell excess products through various channels such as Amazon, eBay, and other phone-based applications and digital platforms. Even effective stock management prevents the chance of running out of the products. Also, effective stock management is effective in avoiding theft or misplacing of different products.
2.5.2 Transparency management
18.104.22.168 Maintaining Deadlines
Effective stock management aids in providing consumers with a clear deadline. in simpler terms, customers get informed about the products and when they will be available for sale. In particular, efficient warehouse management ensures dispatch and packaging of goods within the deadline and maintains a loyal customer base. Effective stock management includes several policies, such as safeguards against price fluctuations and supplies that ensure financial transparency.
22.214.171.124 Inaccuracy in Paperwork
As mentioned earlier, paperwork involves a large part of inventory management. Inventory management helps to determine the prices of the products. For that reason, even a minor error can cause confusion about the prices of the products, and pricing is the fundamental step towards financial transparency (Munedzimwe, 2018) For example, some statistics show that globally, 1.75 trillion US dollars are lost due to mismanaged inventory. Even nearly 81 percent of all consumers complain about "out-of-stock" situations, which means that products are not available to them. So, effective stock management helps to supply goods according to customer demands.
126.96.36.199 Demand Estimation
Effective stock management helps in estimating whether the demand is high enough and arranging products accordingly. This estimation can be made on the basis of different data, such as market conditions, etc.
188.8.131.52 Producing Financial Statement
Usually, the term "financial transparency" refers to the timely, reliable, and meaningful disclosure of a company's financial statements, and this financial statement can't even be prepared without an effective stock management plan.
184.108.40.206 Risk of Theft and Misplacing
Stock management helps to avoid theft or misplacing of different products. It also helps to arrange and organise the products with proper labels and barcodes. In this way, it reduces the chance of theft and misplacing the objects. If the whole system were digitised, the status of every product could be found with a click. So, identifying the error becomes easier and it helps during the financial audit.
220.127.116.11 Reducing Cost
The main purpose of stock control is to reduce the cost of the holdings and also to ensure that customer demands are met. It ensures that there are enough products stored in the warehouse as well as that the inventory shouldn't be overflowing with goods at the same time. This amount, or the "safe amount," not only helps to meet the market demand, but also ensures that when the demands are low, the business enterprise shouldn't face any loss. The main issue with overstocking is that it ties the business capital with the holdings that otherwise could have been used in other places. In this way, the company has a clear picture of all its financial components, all its assets and liabilities. Hence, stock management ensures financial transparency.
2.6 A possible strategy for stock management
According to the literature, some strategies are effective in planning and executing stock management.
Business management should emphasize volatile and instantaneous consumer demand. It means that only a definite amount of goods should be stored to meet customer demand, but overstock doesn't occur. It is also effective in reducing warehouse costs and optimizing the available storage space. Only a "safety stock" should be stored to meet emergency requirements. If there is any emergency surge in demand, the company can meet the demand for the time being while the supplies last (Mvundura, et.al, 2020)
The whole inventory management procedure should be digitized. Instead of using hand-written notes or manual MS Excel barcodes, can be used instead. In this way, the status of every product can be known with just a click. In this way, the whole process of stock management will be more precise and less time-consuming. This also helps to reduce excess costs and increase both efficiency and productivity.
Using data related to finance and markets helps in the accurate prediction of demand. This helps to run the business smoothly. Even software can be used in stock management. It reduces the chances of human error, thus increasing the overall productivity of the business. This software can be integrated with mobile technology for more efficiency. Through this, business owners or senior officials can access the stock data at any time (Eminue, et.al, 2019)
All this digital information and data helps forecast the inventory accurately. Through this business forecast, the business owners are able to make proper decisions and more accurate predictions about the overall market situation and demand from their customers.
Implementing a conventional manufacturing strategy can be helpful in stock management. This helps to prevent idleness among the employees, and productivity increases rapidly.
The software can be used to implement material requirements planning. In this process, the whole stock management method can be broken down into several planning periods. This ensures the smooth running of the business.
The batch tracking strategy or the strategy to track the products while they pass through different levels of the distribution chain can be implemented. In this process, the goods are tracked using their batch number. This helps to optimize the supply chains and manage the stock more effectively.
Using a consignment inventory strategy can also be very effective. In this process, the wholesalers give their products to the retailers without any payment being made by the retailers. In this process, the wholesaler still owns the products until they are sold by the retailers.
A smart warehouse often acts as an effective network, helping business enterprises monitor, store, and control the products. This approach helps to ensure the financial transparency of the business organization.
Different open sources, the internet, etc., are widely used technologies that help to control, monitor, and manage the inventory. It helps to stack products and meet customer demands. For example, one business organization can use the technology of radiofrequency to smoothly manage inventory and run the business effectively.
2.7 Literature Gap
This literature review includes the reasons why inventory management is important and how inventory management is effective in increasing the productivity of the business and also ensuring financial transparency. This literature review discusses in detail the reasons behind the shortage of stocks. But this piece of literature review lacks different techniques and aspects that help to improve stock management. One thing that is evident in this global financial market is that it is a highly competitive place, and demand is always fluctuating. For this reason, there is no single strategy available that is effective in improving stock management. This literature review doesn't include any detailed analysis of the strategies that are effective in improving stock management. This literature review identifies two main reasons behind the shortage of stock (Bulgakova, & Vertakova, 2020) The two reasons for this are poor leadership qualities and inadequate stock management techniques. This literature review collects necessary information from different articles published in different journals. As this review lacks information on effective strategies, this study intends to develop approaches and techniques to help the stock management techniques of different business organizations.
Research methodology pertains to a forum for discussion about the particular strategies or methods appointed and utilized in a research article. The discussion furthermore encompasses theoretical notions that further furnish knowledge, information, and evidence on method assignment and requisition. This research methodology will discuss the procedure used for collecting data through the process of secondary methods.
3.2 Research Philosophy
Research philosophy is a hypothesis about how information and data on manifestations should be obtained, analyzed, and utilized. The phrase epistemology, as obstructed to the eulogy, wraps several ideologies of research procedures. The term research philosophy pertains to a procedure of philosophies and assumptions about the development and improvement of awareness. While these outcries are rather sincere, this is specifically what to enforce when beginning a research technique or formulating mastery in a specific province. Research philosophy is a crucial portion of the exploration of methodology. Research philosophy is allocated into ontology, epistemology, and axiology. These philosophic strategies are prepared to deduce which address an experimenter should put up with and why emanated from the exploration issue (Muczy?ski, 2022).
Here, in this lawsuit, the interpretivism procedure has been utilized. This strategy is founded on the public life planet, and the discrepancy between timely strategies and interpretive reaches is that while customary scientists research the trustworthiness of data to discern statutes, public science bargains with the attitude of selves. Research philosophy is founded on the examination awareness of validity, sensibility, and proficiency that leads the way in anthology, data, and examination. This investigation will concentrate on interpretive exploration philosophy. This study philosophy will concentrate on various impressions and evaluate those impressions to obtain substantial outcomes. The search will utilize interpretivism to collect the decent inventory supervision techniques (Kurpayanidi, 2020).
3.3 Research Approach
Research methodology is a proposal and protocol that comprises strides from vast assumptions or hypotheses to comprehensive strategies of data exhibition, examination, and understanding. Accordingly, it is founded on the essence of the research issue being dealt with. The data of the Qualitative kind requires to be evaluated utilizing inductive techniques. On the other hand, Quantitative data utilizes deductive procedures. In varied classifications of data, inductive and deductive examination techniques are utilized. Nonetheless, there should be some kind of viscosity between techniques, methodology, and examination. This is significant for indicating reasoning. Accordingly, for the purpose of research analysis to be reasonable to readers, exploration should be direct to research analysis outcomes (Chin, 2022).
This study concentrated on an inductive research strategy to justify search objectives and ideals. It asserts that inductive analysis or research techniques concentrate on developed knowledge and evaluate multiple alternatives to formulate modern hypotheses. Accordingly, this research has developed and expanded modern assumptions about the most reasonable method or approach to inventory administration.
3.4 Research Design
The research design pertains to the bracket of the market study is research techniques and procedures selected by experimenters. The design preferred by the researchers facilitates them to utilize techniques or designs reasonable and suitable to the analysis and to administer research successfully in the prospective days. The study design furthermore encompasses components of data assortment, the usage of reasonable devices to assess the data, and the examination of the required data. As an ordinance of thumb, the research issue that a corporation decides to maintain is a determinant of an experimenter's intention of research design, not the distinct path around.
This research study concentrated on an exploratory exploration or research design to resolve the investigation issue. Exploratory research constructs benefit the examination of evidence and formulation of modern theories. This research has an exploratory technique to formulate modern notions about inventory administration techniques. It takes up the researchers' impressions and notions about a domain as a guiding juncture for future examination and is furthermore utilized to distantly examine hypotheses (Rahayu et al.,2021).
3.5 Research Strategy
A research strategy is a stride development strategy that guides an experimenter's thought procedure. It facilitates experimenters to administer research systematically and on period. The primary objective is to inaugurate the central ingredients of the exploration, such as the research issue, research region, research priority, research technique, and eventually the research analysis methodology. Research techniques or strategies assist researchers to assign the perfect and the right data assortment and examination methods. Accordingly, selecting the right technique when administering a study is important. Some classifications will concentrate on the several species of techniques or strategies that can be utilized.
Here in this study qualitative method has been used. This technique is frequently utilized to comprehend the root reason or people's awareness of distinct evidence or problems. It does not pertain to numerical sets of data. It furnishes insights into the research issue and therefore contributes to the accomplishment of research purposes. Numerous techniques that can be utilized encompass consultations, statements, open-ended analyses, and concentrated faction conversations from the articles (Khujamurodov, 2020).
3.6 Data Collection
Data collection is the procedure of collecting evidence from all pertinent
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