Inventory Management

                                                

There are 3 brands under the Crate and Barrel; Crate and Barrel, Crate and Kids and CB2. Across all three brands there has to be inventory management on over 13,000 SKU numbers. With that many SKU numbers, tracking and monitoring all packages has to be a point of emphasis so that they can have them in the right places at the right time; that being either in the distribution center or stores. Also, they would need to make necessary changes to missing or damaged packages, that comes with inventory. Crate and Barrel uses IBM AS400(IBM i) as part of their server and database management as well; extremely reliable in inventory management. It is older but it is with the recent hardware updates, it is still what is used for this aspect of the business. Reviewing and analyzing shipping and receiving problems and that can come from misships, damaged products, delays on products etc. They use an EOQ because they use a make-to-stock strategy.  The reason they have a make-to-stock strategy is because the demand for their product is high so based on that demand, they are making the orders; anticipating. An example of them using EOQ would be to calculate EOQ on one of their highly rated electrical products and that is the Breville toaster which costs $129.95. 

The Demand is 600, the order cost is $60 and the holding cost is $20. When this is put into the EOQ formula, the rate for which a new order is put out for the Breville toaster is 60 units.

And because of this strategy, they have some other costs they have to factor in. Ordering cost (the cost of preparing a purchase), holding cost (the cost of keeping items or products on hand), storage and handling cost (the use of storage for the products and also the moving about of these products). Based on the frequent scanning of SKU numbers, the continuous review “Q” system helps the company out. They are able to stay on top of all their merchandise and with this system, this is a daily thing.