Inventory Management
Inventory turnover ration = Cost of Goods Sold / Inventory
If the ratio is 6, for example, you can calculate the annual figures, such as:
365 / 6 = 60 days on the shelve of the store
Buying Direct – Buying goods and services directly from the manufacturer
Food and services are usually the types of products that can be purchased directly.
Advantages of the direct business model:
1. Relationship with customer = increases demand
2. anticipate demand = Better information = Better forecast
3. Improve margins
1 + 2 = customization, provide what consumers want = it’s good because it increases demand and allow the firms to increase its price
But customization or “cutting the middle man” will move the firm from economies of scale to dis-economies of scale
Operation – The making and delivering of any goods and services
Roles of Vice President of Operations
1. Inform strategies or goals to other departments under the company
2. How to get things done