Benefit of Carry Minimal Inventory

‘Factor and benefit to carry minimal amounts of inventories

The factor that causes the company to carry minimal amounts of certain inventories is the cookies have limited or short shelf life due to there are no any additives or preservatives added into the cookies. Thus, the company produce the cookies based on the order from customers to avoid the cookies expired. For example, when the customer place a huge order for the cookies, the production of company certainly will increase with the order of received. The cookies are require to load immediately onto the trucks and send to distributor in order to maintain the quality of the cookies. If the cookies are not consume within a period of time, the quality of cookies will be affected like lose freshness and this tend to cause high return rate due to low demand of the cookies. This might cause the company to make loss due to unable to sell all the cookies before it expired.

Besides, the company also carry minimal amount of inventories like cookie boxes, shipping boxes, labels, and cellophane for wrapping. For the labels, the company will reorder the label frequently in small batches to prevent waste of unused label due to FDA label requirement are subject to change.

The company also carry minimal amount of ingredient which is known as one of the inventories by refill two or three times a week depend on the demand of cookies. This is because the quality of ingredients are easy to be affected with the humidity of the surrounding in the silos. The production of the cookies will be affected and cause the delay in cookies delivery when there is defect of ingredients.

The benefit of the policy conducted by the company is there will be less or no wastage. The company with the practice of good policy with producing the cookies according to the order form customer. This help in eliminate or minimize the chances of cookies change to the waste due to short shelf life of non-preservative cookies. Besides, the company with...