Menu Expansion and Inventory Shortage

In your opinion, in what ways will the expansion of the menu create problems for inventory management?

Expansion of the menu can make inventory manager order more inventory than what is needed, which increases the cost of holding or storing inventory. Also, some of the items may not be used since the demand for foods that use the items might be low, which can lead to damage to such goods or items. Therefore, management of raw materials becomes a hectic task for inventory management. According to (Gallino, Moreno, & Stamatopoulos, 2017) stores prefer carrying products with high demand. Such a strategy can help reduce storing cost and prevent spoilage/damage.

If you are a supermarket manager, how would you evaluate the criticalness of an inventory shortage? What approaches you may use to avoid frequent shortage?

As a supermarket manager, I will use the following ways to evaluate the criticalness of an inventory shortage:

I will calculate the correct number of products or items that are kept in stock for use for a long period, like for a year. Then, calculate the order storage cost for keeping such items in stock.
I will consider the delivery rate and use rate of the product. The delivery rate helps me prevent delays and use rate help me know how much raw materials are used in a day, week, or month to keep the right forecasts.
I will compute the options that are available for the product in store to be used when such a product is not available.

The approaches I will use to prevent frequent shortage include:

Eliminate uncertainty by knowing the lead time and ensuring correct forecasting.
Inventory management by implementing an inventory management system that provides visibility since I will know inventory levels to order more stock when levels reduce beyond the set level.
Scheduling production since it helps know the amount of stock needed for each process.
Use performance metrics since it helps know the weak areas of the production cycle, which, in turn, identifies shortages experienced in the business. For instance, an algorithm can be used to harmonize procedure to realize shortage impact in an organization (Musazzi, Di Giorgio, & Minghetti, 2020). Thus, metrics are significant in preventing inventory shortages.

References

Gallino, S., Moreno, A., & Stamatopoulos, I. (2017). Channel integration, sales dispersion, and inventory management. Management Science, 63(9), 2813-2831.

Musazzi, U. M., Di Giorgio, D., & Minghetti, P. (2020). New regulatory strategies to manage medicines shortages in Europe. International journal of pharmaceutics, 579, 119171.