Developing a cost-effective stock control system for the Ashesi shop
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Abstract
The Ashesi souvenir shop is a relatively small shop with a restricted target market.
The shop since its inception in 2016 has been experiencing lapses in its inventory control as
there have been continuous stockouts due to a poor understanding of what to order, when to
order and how to order.
According to research, the shop can prevent significant losses in revenue by
developing a cost-effective stock control system which provides key information on the
usage value, unit cost and accessibility of the shop's items, which are all strategic elements
of arriving at the optimal decision of what to order, when to order and how to order. To
address the problem, the following solution was proposed. The solution entails the
combined application of two models; namely, the SDE model and the HML models which
arrive at optimal decision areas of what to order, how to order, and when to order items
essential to revenue generation in the shop. Both models reduce wastage and improve the
efficient disbursement of funds to increase profitability.
The final element of the solution is an all-inclusive POS system to synchronize all
stock related information. To bring this to bear, the management would need to spend
resources and time to find the multiple vendors within the region as well as expend financial
resources on the POS system. To complete this project, it is critical that the solution is
carried out during the off-season when the shop is not in full operation. This will enable that the models are effectively carried out with little distractions.