Rationale for customer-based inventory management strategies critical thinking example


Product availability is one way through which companies thrive to satisfy their customers. This requires the adoption of an inventory management strategy that is efficient, effective and focuses on the customer. Inventory control strategies enable companies to provide different amount of commodities to their customers depending on their needs. The complexities and dynamism of the 21st century have forced companies to adopt policies that put the customer at the forefront of every business decision. Businesses that intend to provide quality service to their customers should ensure that they implement strategies that supply optimum stock levels to their customers.

Lower pricing
These strategies allow the company to reduce the amount of time that commodities stay on the shelves waiting for purchase. This is because the products that exhibit high demand are made highly available while those that have low demand are made less available. This has the effect of reducing the cost of holding inventory. The business can pass this advantage on to its customers in the form of lower prices.

Provision of accurate information

One way to enhance the provision of customer service is by giving proper information about the availability of products offered by the firm. These strategies enable the firm to provide adequate details about the stock of products that is available to its customers. This helps the company retain current customers and obtain new customers.

Reduces time to fulfill customer needs

These strategies assist the company to understand the duration required to make certain orders so that customers’ demands for products are met in time. This means that the necessary commodities will be made available to the customers at the right time. This ensures customer convenience and thus boosts customer service delivery.

Reducing the opportunity cost for consumers

Individuals are often rational in their consumption patterns. As a result, they will often opt to move from one store to another in order to acquire the items that they require. Inventory management strategies based on customers help to reduce the time and money spent by individuals in order to obtain certain items by making them available to them. By monitoring and evaluating sales patterns, companies are often able to predict and forecast the future demand patterns of their customers.

Customer loyalty

The company can ensure that it achieves customer loyalty by making its products available to the customers on a continuous and timely manner. Customers should be able to buy the goods when they require them. Managing the inventory of the company in a way that is focused on meeting the needs of the customers ensures that they stick to the company. This is because the company acquires the loyalty of its customers who have a good image of it.


In summary, producers of commodities often put emphasis on the production-related activities. They often tend to ignore that the delivery of services to customers is the most important component of the supply chain. Retailing firms therefore have to adopt inventory management strategies that are centered on customers in order satisfy their needs. These strategies are not discriminatory since they ensure quality service delivery to all customers on the basis of needs that have to be satisfied. The needs of a majority of the people are satisfied because the most highly demanded products are made available to the consumers.

Works Cited

Frazelle, Edward. Supply Chain Strategy: The Logistics of Supply Chain Management. New York: McGraw-Hill, 2002. Print.