Inventory Management using ABC Analysis@Darling Digital
Darling Digital Pvt Ltd. (Darling Digital), a leading electronics retailer, founded in 2010 by Manish Agarwal (Manish) had nearly 25 employees in more than five stores and multiple distribution centres. With five locations across India, Darling Digital provided home theatres, sound surround systems, headphones, speakerphones and other video and audio accessories. The chain aimed to meet its customers’ needs with its products and with the aftersales services. Thus, customer service became an essential element of Darling Digital’ successful retail model.
The store was located on a busy street in Bangalore and it had limited storage space for inventory. The founder, Manish, observed that demand for few of its products increased while demand for few of its products decreased. Demand was irregular, however, Manish found it difficult to manage the inventory. They frequently ran out of some crucial products but seemed to have endless supply of others. In addition, due to improper inventory management, inventory costs also increased..................
This ABC classification process helped manage the inventory effectively. The implementation of the ABC Analysis became a key element of supply chain and inventory management across Darling Digital stores.
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Assignment Questions
I. What is meant by ABC Analysis? Elaborate.
II. How did Tanveer analyze Darling Digital’s inventory using ABC Analysis?
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Exhibit
Exhibit I: Annual Demand and Items