Inventory Systems Summary

Topics: Inventory, Balance sheet, Natural gas Pages: 9 (3164 words) Published: November 28, 2010
“Correct management of inventory can be the difference between a business that hums along efficiently and one that sputters out prematurely” (Hoyt, 2002). Management of inventory is important to any business that wants to succeed. Companies purchase inventory systems to help manage the inventory of an organization. Team B Consulting has been requested by Dr. Christopher DeClerk of the University of Phoenix to evaluate different inventory systems. For the purpose of this summary, Team B reviewed the following organizations and their inventory management programs: Best Buy, Dell, Fed Ex, the U.S. Energy Information Administration, and Wal-Mart. The summary includes a description of the chosen companies and their inventory systems, and a comparison describing the advantages and disadvantages of each system. Best Buy

Best Buy is the largest consumer electronics store in the world! Each year it increases its presence in the market share and distances itself from others in the industry. Best Buy is headquartered in the Twin cities area of Minnesota, where it handles all main business functions and the leadership that manages its 180,000 employees and 4,000 stores across the globe (Best Buy, 2010). During the previous fiscal year, Best Buy accumulated nearly 50 billion in revenues and 2.2 billion in operating revenue. They also reported that they possess 18.3 billion in total assets and 6.3 billion in total equity.

Best Buy has a large array of merchandise including: consumer and commercial furniture, small and major appliances, and a wide assortment of consumer electronics. They also offer an increasingly large list of services. These services include Geek Squad computer services, Best Buy for Business commercial services, and many other services designed specifically for the end user. They operate stores in many countries across the world; however they also operate their company online. From their website,, many of their products and services can be ordered and set up for delivery.
The different types of products and services Best Buy offers in addition to the different options available to purchase and receive their merchandise makes Best Buy a very difficult company to maintain. They are successful because of the time and money put into their inventory systems. To maintain continuity across the board for all of their partner companies and different store brands they operate as, Best Buy uses a similar inventory management system that allows them to track inventory, along with a transaction management system that directly adjusts and updates the world wide inventory both in warehouses and within each store.

Most products that Best Buy sales are shipped directly from the manufacturer to the many warehouses and distribution centers across the US and the world where the stores and online sales can pull and ship directly from. One change that Best Buy has gone from throughout the past five years is a switch to a partially vendor based management system. With this new system, Best Buy will limit the vendors and distributers that they purchase from, and will relinquish some of their inventory control over to them. The innovation created by this new system allows vendors to monitor inventory levels and to ship and replenish product as levels get low. There are many advantages yet some disadvantages to this as well, however it helps to distance themselves from their competitors and allows them to focus on fulfillment and other areas of the business.

Inventory levels over the past 4 years have remained on an increasingly consistent track as their revenue has risen. Each year as the revenues and assets rise, it is based partly on the fact that they enter new markets and open new stores across the world. The latest opportunities that they have come across include new stores in Europe and other areas overseas. This is new territory for Best Buy but has been a successful...
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