INVENTORY MANAGEMENT OF TRADING ENTERPRISES IN MODERN CONDITIONS

Abstract

The article is devoted to peculiarities of trade enterprises’ inventory management, which allows a modern company to maintain a balance between demand satisfaction and inventory storage costs. Stocks perform three functions: accumulation; protection against price changes and inflation; cost management. When determining the optimal balance between costs associated with keeping inventories one should determine that the sum of all relevant costs must be minimal. The main indicators that allow to determine efficiency of inventory management are considered. The ratio between the dynamics of stocks and the volume of sold products was analyzed on the example of wholesale trade enterprises (period 2013-2022). The main ways of more efficient use of stocks are proposed. Necessity of developing the enterprise’s product policy has been proven and its main stages have been determined. Peculiarities of the model of economically justified order size, which are used to optimize the size of production stocks and stocks of finished products are considered. Models of inventory management with a fixed period and a fixed volume are considered, the choice between them depends on a number of factors, including quantity of stocks, their price and importance as well as volume of the order. During the formation of the inventory management model, it is necessary to take into account specifics of business, limitations of the external environment, and the subjectivity of management decision-making. The main problem that arises when solving the task of stock management is the development of an effective and reliable system of their management, which should provide smooth production process, its realization maintaining the optimal stocks volume and minimizing expenses. In general, effective inventory management makes possible to reduce the duration of the production cycle and decrease current costs for their storage; to release financial funds from the current turnover in order to reinvest in other assets; to reduce production losses as a result of eliminating the shortage of production stocks; to accelerate the turnover of stocks, reduce the risk of their loss and reduce the costs of their storage. Managing inventory levels is essential in order to establish and support a company's long-term competitive advantage.