ANALYSIS OF RETAIL INVENTORY REQUIREMENTS

A SUMMER INTERNSHIP REPORT

submitted by

MOSHIKRAJ S

3122218001064

in partial fulfilment for the award of the degree of

MASTER
OF
BUSINESS ADMINISTRATION
MBA (2021-2023)

SSN SCHOOL OF MANAGEMENT

Sri Sivasubramaniya Nadar College of Engineering
(An Autonomous Institution, affiliated to Anna University, Chennai)
Rajiv Gandhi Salai (OMR), Kalavakkam– 603110

October 2022
 BONAFIDE CERTIFICATE

This is to certify that the report on the project work entitled “ANALYSIS OF RETAIL
INVENTORY REQUIREMENTS” is a bonafide record of work done by below mentioned
student of first year, Master of Business Administration, SSN School of Management, Chennai
in partial fulfillment of the requirement of the academic internship in the subject, under my
guidance.

Signature
Dr. Sudarsan Jayasingh

2
CERTIFICATE

3
 ACKNOWLEDGEMENT

Firstly, I feel gratitude for this opportunity to work at BIGTAPP INDIA PVT LTD. It was a great chance
for learning and professional development.

I would like to express my sincere gratitude to Mr. Manu George Mathew (Data Science & Analytics),
BIGTAPP INDIA PVT LTD., Chennai his able guidance right from the beginning to the end of the
internship. I am grateful for having a chance to interact with employees who helped me to finish my
project with ease.

I feel to extend my deep sense of gratitude to my guide Prof. Dr. Sudarsan Jayasingh whose valuable
guidance and kind supervision given to me throughout the course which shaped the present as its show.

I express my sincere thanks to our Director Dr.K. Hariharanath for encouraging and extending to
carry out this internship. With due regards, I convey my gratitude to each one who have been of great
support to me.

Date:

Place: Chennai

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 TABLE OF CONTENTS

Chapter No Title Page No

1 Introduction 9
1.1 Industry Profile 9
1.1.1 About the Industry 9
1.1.2. India Retail Industry Scenario - Growth 9
1.1.3. Retail Growth Facilitation Factors 10
1.1.4 Market Size 10
1.1.5 Investments / Developments 11
1.1.6 Government Initiatives 12
1.2 Company Profile 12
1.2.1 Service Offered 13
1.2.2 Vision 13
1.2.3 Competitors 13
1.3 Need of the study 13
2 Literature Review 14
2.1 Review of Literature 14
3 Research Methodology 16
3.1 Problem Statement 16
3.2 Research Objectives 16
3.3 Research Design 16
4 Data Analysis and Interpretation 17
4.1 Analysis of Data 17
5 Findings, Suggestions and Conclusion 32
5.1 Findings 32
5.2 Suggestions 33
5.3 Conclusion 34
6 Appendices 35
7 References 37

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 LIST OF FIGURES

Figure No Figures Page No

1.1.2 Retail Market in India 10

1.1.4 IBEF Industry Retail India Market Size 11

4.1.1 Retail Industry Domain Percentage 17

4.1.2 Product Buying Concentration Percentage 18

4.1.3 Over Forecast - Customer Influence percentage 18

4.1.4 Product Renew Status 19

4.1.5 Inventory level status 20

4.1.6 Forecasting Product Status 21

4.1.7 Selling Forecasting Product Percentage 22

4.1.8 Shop Visit - Frequency Status 23

4.1.9 Product prioritization Status 24

4.1.10 Product Long Term Forecasting Status 24

4.1.11 Perishable Vs Non-Perishable Percentage 24

4.1.12 Stock Maintenance Status - Data Storage 25

4.1.13 Stock Shortage Check Status 25

4.1.14 Product Buying Status 26

4.1.15 Product Forecasting Percentage 27

4.1.16 Under Forecasted Product - Customer Reactions 28

4.1.17 Top Selling Products 29

4.1.18 Weather Status - Sales of a Product 30

4.1.19 Product Stays in Inventory Status 31

4.1.20 Environmental Status - Affect Percentage 31

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 LIST OF TABLES

Table No Table Description Page No

4.1.1 Retail Industry Domain Percentage 17

4.1.2 Product Buying Concentration Percentage 18

4.1.3 Over Forecast - Customer Influence percentage 18

4.1.4 Product Renew Status 19

4.1.5 Inventory level status 20

4.1.6 Forecasting Product Status 21

4.1.7 Selling Forecasting Product Percentage 21

4.1.8 Shop Visit - Frequency Status 22

4.1.9 Product prioritization Status 23

4.1.10 Product Long Term Forecasting Status 24

4.1.11 Perishable Vs Non-Perishable Percentage 24

4.1.12 Stock Maintenance Status - Data Storage 25

4.1.13 Stock Shortage Check Status 26

4.1.14 Product Buying Status 27

4.1.15 Product Forecasting Percentage 27

4.1.16 Under Forecasted Product - Customer Reactions 28

4.1.17 Top Selling Products 29

4.1.18 Weather Status - Sales of a Product 30

4.1.19 Product Stays in Inventory Status 30

4.1.20 Environmental Status - Affect Percentage 31

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 ABSTRACT

The inventory of materials constitutes the most significant part of current assets and
working capital in any organization. A small saving in the inventory will mirror a crucial edge
in benefit of the organization. Retail shops generally face two types of inventory-related
problems which are either stock-out or overstock. As a result, most of the shops fail to maintain
their product availability with the lowest possible inventory cost. Due to this problem, they are
facing difficulties from the increase and decrease in the Inventory level. This research project
deals with the problems faced by the retail shop owners in the Electronics, conventional and
textile industry. The main objective of this research is to provide them with the solution so that
they don’t over forecast a product and there shouldn’t be a product which is under forecasted.
When the stock is over forecasted the inventory will increase and suppose if it is a perishable
product then it may even be spoilt. At the same time if the product is under forecasted by not
considering the demand of the product in the market the customers will be directly affected by
it, this also leads to customer dissatisfaction. Through proper inventory control techniques, the
probability of stock-out as well as overstock situations in retail shops can be minimized. The
sole purpose of the study is to provide a guideline for inventory managers that will help them
to ensure product availability at the right quantity as and when required. This real case
demonstration will certainly help future researchers as well as retailers to maintain proper
control & management of inventories

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 CHAPTER 1 - INTRODUCTION

1.1 INDUSTRY PROFILE

1.1.1 ABOUT THE INDUSTRY

The role of inventory management is to ensure that stocks of raw material or other
supplies, i.e., work in-progress and finished goods, are kept at levels that provide maximum
service levels at minimum costs. Now-a-days, organizations, and especially those performing
activities in the retail functions, face multiple challenges in the planning and management of
their resources based on their requirements. For this sector, having efficient and effective
management of human resources, technological advancements, or material resources
functionalities refers to the performances that companies characterized by the experience
gained in their management could obtain over time. Therefore, the correct inventory
management has become essential, especially in organizations dedicated to retail segment of
business.
The determination of the optimal inventory level is a fundamental part of the life of
organizations due to the high investment that it represents at the time of its acquisition,
administration, and maintenance required for the competent work environments. This because
the realizable asset occupies a significant percentage within the total assets which is required
for the capital requirements. Hence, in its correct ordering and administration has been implied
to minimize the risk of contracting results that may put the health of the company at risk status.
Various technologies have been developed over time for inventory management, going from
basic manual reporting to an Integrated Information System (IIS) and Management Information
System (MIS) which can help to “decide how and where orders should be fulfilled to improve
service levels while decreasing total costs”. Moreover, these new functionalities can
collaborate in the most effective handling of materials and better manage the cycle of
purchasing which will act as a reception in allocation thus results in higher profits.

1.1.2. INDIA RETAIL INDUSTRY SCENARIO - GROWTH

Retail Industry in India is expected to touch US$ 1.5 trillion by 2030 from US$ 0.8
trillion in 2020. Indian retail industry has emerged as one of the most dynamic and fast-paced
industries due to the entry of several new players. It accounts for over 10% of the country’s
gross domestic product (GDP) and around eight% of the employment. India is the world’s fifth-

9
largest global destination in the retail space. India ranked 73 in the United Nations Conference
on Trade and Development's Business-to-Consumer (B2C) E-commerce Index 2019. India is
the world’s fifth-largest global destination in the retail space and ranked 63 in World Bank’s
Doing Business 2020. India is the world’s fifth-largest global destination in the retail space.

In FDI Confidence Index, India ranked 16 (after US, Canada, Germany, United
Kingdom, China, Japan, France, Australia, Switzerland, and Italy). The urban Indian
consumer's purchasing power is increasing, and branded goods in categories like apparel,
cosmetics, footwear, watches, beverages, food, and even jewelry are gradually evolving into
business and leisure that are well-liked by the urban Indian consumer. The retail sector in India
is expected to reach a whopping US$ 2 trillion in value by 2032, according to a recent analysis
by the Boston Consulting Group (BCG).

Figure 1.1.2 - Retail Market in India

1.1.3. RETAIL GROWTH FACILITATION FACTORS

1. Existing Indian middle classes with an increased purchasing power

2. Rise of upcoming business sectors like the IT and engineering firms

3. Change in the taste and attitude of the Indians

4. Effect of globalization

5. Heavy influx of FDI in the retail sectors in India

1.1.4 MARKET SIZE

As per Kearney Research, India’s retail industry is projected to grow at 9% over 2019-
2030, from US$ 779 billion in 2019 to US$ 1,407 billion by 2026 and more than US$ 1.8
trillion by 2030. Revenue of India’s offline retailers, also known as brick and mortar (B&M)
retailers, is expected to increase by Rs. 10,000-12,000 crore (US$ 1.39-2.77 billion) in FY20.

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India’s direct selling industry is expected to be valued at US$ 2.14 billion by the end of 2021.
E-Retail has been a boon during the pandemic and according to a report by Bain & Company
in association with Flipkart ‘How India Shops Online 2021’ the e-retail market is expected to
grow to US$ 120-140 billion by FY26, increasing at approximately 25-30% p.a.

Over the next 5 years, despite unprecedented challenges, India consumption story is
still robust. Driven by affluence, accessibility, awareness and attitude, household consumption
stood at Rs. 130–140 trillion (US$ 1.63-1.75 trillion) in 2021. India has the third-highest
number of e-retail shoppers (only behind China, the US). The new-age logistics players are
expected to deliver 2.5 billion Direct-to-Consumer (D2C) shipments by 2030. Online used car
transaction penetration is expected to grow by 9x in the next 10 years.

Figure 1.1.4 – IBEF Industry Retail India Market Size

1.1.5 INVESTMENTS/ DEVELOPMENTS

1. The Retail sector in India has seen a lot of investments and developments in the recent
past. India’s retail trading sector attracted US$ 3.96 billion FDIs between April 2000-
March 2022.
2. According to data released by the Ministry of Statistics & Programme Implementation
(MoSPI), India’s Consumer Price Index (CPI) based retail inflation stood at 6.71% YoY
in July 2022 on the back of cheaper food prices.

3. In August 2022, Louis Philippe, India’s leading premium menswear brand from Aditya
Birla Fashion and Retail Ltd., announced the launch of its outlet in Vadodara, Gujarat.

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 4. In August 2022, Wipro Consumer announced the launch of traditional snacks and spices
as it forays into packaged foods.

5. In July 2022, Reliance Brands Limited (rbl) partnered with Maison Valentino to bring
to India the most established Italian Maison de Couture.

1.1.6 GOVERNMENT INITIATIVES

The Government of India has taken various initiatives to improve the retail industry in India. Some of
them are listed below:
1. In April 2022, the government approved PLI scheme for textiles products for enhancing
India’s manufacturing capabilities and enhancing exports with an approved financial
outlay of Rs.10,683 crore (US$ 1.37 billion) over a five-year period.

2. In October 2021, the RBI announced plans for a new framework for retail digital
payments in offline mode to accelerate digital payment adoption in the country.

3. In July 2021, the Andhra Pradesh government announced retail parks policy 2021-26,
anticipating targeted retail investment of Rs..5,000 crore (US$ 674.89 million) in the
next five years.

4. Government may change Foreign Direct Investment (FDI) rules in food processing in
a bid to permit E-commerce companies and foreign retailers to sell Made in India
consumer products.

1.2 COMPANY PROFILE

In today’s increasingly aggressive business environment, you need to make decisions
faster than ever. BigTapp is a Singapore head quartered global company that focuses on
providing Big Data & Analytics solutions that help our customers do just that. We provide Big
Data & Analytics solutions on Cloud using a SaaS model that harness poly-structured data
from a myriad of sources at the right latency, derive Insights and convert the Insights to
appropriate business Actions.

BigTapp’s Big "InFo ActiV" platform enables creation of Business Analytics applications
and deploy on Cloud to enable rapid realization of business benefits. A suite of Big Data

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Business Analytics applications developed using the platform under the overarching theme of
Customer Value Management enables BigTapp’s customers to get immediate business
benefits. BigTapp has a strong team of Data Scientists and Domain Experts who provide
Consulting and Managed Services that ensure the realization of business benefits using Big
Data.

1.2.1 SERVICE OFFERED

Big Data extends beyond the internal data and data warehouse infrastructure of your
company. You must comprehend and identify the value in the data that flows both internally
and externally in order to fully take advantage of this opportunity. You can construct a Big
Data Strategy Map with the assistance of BigTapp's knowledgeable Consultants so that you are
fully aware of the types of data you should take into account and the potential value. BigTapp's
structured diagnostic approach quickly identifies the best ways for organisations to use data
solutions, predictive analytics, and directed best action tools. It also identifies the best ways for
businesses to gain the greatest return on their investments in information assets.

1.2.2 VISION
Providing "Analytics for All" (moving from "Analytics Monarchy" to "Analytics
Democracy"). Providing affordable Big Data & Analytics solutions to companies irrespective
of size and scale. Create a culture of "Data driven Decisions" & "Analytics driven Actions"
with whomever we work!

1.2.3 COMPETITORS
1. Business Intelligence Competency Partners. Technology - Private
2. Analytica. Technology - Private
3. Skatys. Technology - Private
4. NT-UX Tecnologia. Technology - Private

1.3 NEED OF THE STUDY

To understand the difficulties faced by the retail industry owners when they over
forecast or under forecast a product. To give a solution for the inventory analysis pertaining to
the retail shop owners.

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 CHAPTER 2 – LITERATURE REVIEW

2.1 REVIEW OF LITERATURE

In On Shelf Availability in Retailing: A Literature Review and Conceptual Framework,

An Honors Thesis by Kristie Jean Spielmaker(2012), University of Arkansas, the researcher
studied the importance of OSA and found that it is a key performance indicator, also, it has a
great impact on customer loyalty and retailer’s profit. This thesis/paper tries to identify the
drivers of poor OSA performance through a three step process. First, a inclusive literature
review was performed to identify the drivers of OOS (out-of-stock) addressed in existing
literature. Second, interviews with industry professionals discovered potential drivers of poor
OSA performance that have been explored at an industry level. Finally, the two lists were
examined against each other and the possible drivers identified.

In Shelf Space Allocation: A Critical Review and a Model with Price Changes and
Adjustable Shelf Heights a research by Mehmet E. COSKUN (2012), tried to critically
review the existing literature of shelf space allocation optimization models and solution
techniques. Then, proposed a comprehensive model for shelf space allocation for a product
category. In this new model with an objective to maximize the retailer's daily gross profits he
tried to emphasize that demand not only as a function of the space allocated to a product, in
terms of the number of display facings, but also as a function of vertical product location in a
shelf section and price sensitivity. Stack ability of the products is also considered and products
can be stacked depending on their package. Further, he tried to show numerically that, price
changes and adjustable shelf spaces can have major impacts on the retailer’s profits.

In Changing Consumer Preferences from Unorganized Retailing Towards Organized Retailing,

a research article by Urvashi Gupta, in this she tried to analyze the factors which influence
consumers to prefer organized retailing over unorganized retailing and vice-versa, identify the
problems faced by consumers from organized as well as unorganized retail outlets and identify
the demographic profile of the customers visiting organized retail outlets and unorganized retail
outlets. In her study she finds that, majority of the consumers are visiting organized formats
for variety, easy availability, cleanliness with additional facility of entertainment for children
and convenient parking facility and restaurant etc. In case of unorganized outlets immediacy

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of the store, credit and bargaining facility balance the tilt. Unlike higher age groups who prefer
to visit Kirana stores, the younger generation has more inclination towards organized retail.
In An Empirical Study of Customer Expectation and Perception in Organised Retail
Sector, research study by Dharmesh Motwani (2012), In his research he tried to identify the
difference between expectation & perception of organized retail sector customers with the help
of renowned model of service quality i.e. Parasuraman’s et al (1988) SERVQUAL model. In
the findings he concluded that there is a significant gap between expectation and perception in
terms of Space management, Quality of services, Empathy etc.

Dr. Girish K. Nair (2013), in his research paper on An Analysis on Customer Perception
towards Service Quality Variables in Selected Organized Retail Outlets, tried to study the
customer perception on Retailer’s Service Quality variables with an aim to identify the
dimensions that organized retailers offers the customers. An analysis of the various retail
service quality variables was done to understand the relationship between them. The study also
tries to explore the factor that attracts the customers towards the organized retail sector in the
capital city of Kerala, (Trivandrum). His study reveals that perception of service quality is
influenced by the various natures among various customers, even some of the general factors
like Personal interaction,

R.S. Chadda (1964) Study had been made on inventory management practices of Indian
companies. The analysis suggested application of modern scientific inventory control
techniques like operations research. These modern scientific techniques furnish opportunities
for the companies, Companies can minimize their investment in inventory but there is
continuous flow of production. He argued that industrially advanced countries, like, USA, were
engaged in developing highly sophisticated mathematical models and techniques for
modernizing and redefining the existing tools of inventory investment.

Rich Lavely (1998) Asserts that inventory means “Piles of Money” on the shelf and the profit
for the firm. However, he notices that 30% of the inventory of most retail shops is dead.
Therefore, he argues that the inventory control is facilitate the shop operations by reducing rack
time and thus increases profit. He also elaborates the two types of inventory calculations that
determine the inventory level required for profitability. The two calculations are “cost to order”
and “cost to keep”. Finally, he proposes seven steps to inventory control.

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 CHAPTER 3 - RESEARCH METHODOLOGY

3.1 PROBLEM STATEMENT

Many shop owners in the retail industry are facing problem related to the Inventory
levels and especially inventory management. Due to this problem, they are facing difficulties
from the increase and decrease in the Inventory level. This research project deals with the
problems faced by the retail shop owners in the Electronics, conventional and textile industry.
The main objective of this research is to provide them with the solution so that they don’t over
forecast a product and there shouldn’t be a product which is under forecasted. Over and under
both have its own positive and negative side, but in this research project we are considering
the cons of both over and under forecasted and trying to minimize it which help a lot of retail
shop owners.

When the stock is over forecasted the inventory will increase and suppose if it is a
perishable product then it may even be spoilt. At the same time if the product is under
forecasted by not considering the demand of the product in the market the customers will be
directly affected by it. In this research study we will try to give the retail shop owner the
solution to maintain profit at most time by the forecasting the demand of the product correctly
using the inventory metrics.

3.2 RESEARCH OBJECTIVES

1. To know the Analysis of retail inventory requirements.

2. To know if the product is over forecasted or under forecasted
3. To determine the consequences of over and under forecasting on customer satisfaction

3.3 RESEARCH METHODOLOGY

The following details show the research methodology that has been carried out in this research
work:
1. Research Design:
The descriptive research method is used in our research and it is able to describe the
Characteristics of variables of interest in a situation.

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 2. Data Source:
The method of data collection is primary.
3. Data Collection:
We have collected the primary source of data from people. Since it was carried out on
small sample size, pertaining to retail stores. Under primary data collection, the type of
data collection is quantitative method.
4. Sample Size:
The sample size is 10

CHAPTER 4 – DATA ANALYSIS AND INTERPRETATION

4.1 ANALYSIS OF DATA

4.1.1 - RETAIL INDUSTRY DOMAIN PERCENTAGE
Retail Industry Retail Industry Domain Percentage
Clothing Or Textile 30.00%
Conventional Store (Groceries, Vegetables, Fruits ) 30.00%
Electronics 40.00%
Table 4.1.1 - Retail Industry Domain Percentage

45.00% 40.00%
40.00%
35.00% 30.00% 30.00%
30.00%
25.00%
20.00%
15.00%
10.00%
5.00%
0.00%
clothing or textile conventional store ( groceries, Electronics
vegetables, fruits )

Figure 4.1.1 - Retail Industry Domain Percentage

INFERENCE
From the above study - Out of 10 respondents, it’s interpreted that,
1. 40 percentage of the respondents are electronic shop owners
2. 30 percentage of the respondents have conventional store
3. 30 percentage of the respondents are having clothing store in the Retail industr

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4.1.2 - PRODUCT BUYING CONCENTRATION PERCENTAGE
Response Product Buying Concentration Percentage

Maybe 20.00%

No 10.00%
yes 70.00%
Table 4.1.2 - Product Buying Concentration Percentage

80.00%
70.00%
70.00%
60.00%
50.00%
40.00%
30.00%
20.00%
20.00%
10.00%
10.00%
0.00%
Maybe No yes

Figure 4.1.2 - Product Buying Concentration Percentage

INFERENCE
From the above study - Out of 10 respondents, it’s interpreted that,
1. 70 percent respondents will concentrate only on the product which the customer buys
more often this is because not all the products can have the same number of sales.

2. 20 percent of the respondents have answered maybe as in it was a seasonal change in

the demand of the products, sometimes majority of the products sales will be high and
the shop owner tend to concentrate on lot of products.

3. Only 10 percent of the respondents will not concentrate on a single product.

4.1.3 - OVER FORECAST - CUSTOMER INFLUENCE PERCENTAGE

Response Over Forecast - Customer Influence percentage
Maybe 20.00%
No 40.00%
Yes 40.00%
Table 4.1.3 - Over Forecast - Customer Influence percentage

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 45.00%
40.00% 40.00%
40.00%
35.00%
30.00%
25.00%
20.00%
20.00%
15.00%
10.00%
5.00%
0.00%
Maybe No Yes

Figure 4.1.3 - Over Forecast - Customer Influence percentage

INFERENCE
From the above study - Out of 10 respondents, it’s interpreted that,
1. 40 percentage of the respondents influence the customer to buy the product other than
what they wanted to buy since they have already over forecasted the product and at the
same time 40 percentage of the respondents won’t influence the customer to buy the
products and they give only what customer wanted.
2. 20 percentage of the respondents are not sure on whether they will influence the
customer based on the demand of the products.

4.1.4 - PRODUCT RENEW STATUS

Response Product Renew Status
Depending upon the sales 50.00%
Once in a month 20.00%
Once in a week 30.00%
Table 4.1.4 - Product Renew Status

60.00%
50.00%
50.00%
40.00%
30.00%
30.00%
20.00%
20.00%
10.00%
0.00%
depending upon the sales once in a month once in a week

Figure 4.1.4 - Product Renew Status

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INFERENCE
From the above study - Out of 10 respondents, it’s interpreted that,
1. 50% of the respondents renew the inventory only depending upon the sales and not on
other factors
2. 30% of the respondents renew them once in a month which is also based on the sale of
the products

4.1.5 - INVENTORY LEVEL STATUS

Levels Inventory level status
High 30.00%
Low 20.00%
Medium 50.00%
Table 4.1.5 - Inventory level status

30.00%

High
Low
50.00%
Medium

20.00%

Figure 4.1.5 - Inventory level status

INFERENCE
From the above study - Out of 10 respondents, it’s interpreted that,
1. 50% of the respondent’s current inventory level is medium and followed which high
and low.
2. So, this lets us that most of them have a good amount of inventory stored with them.

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4.1.6- FORECASTING PRODUCT STATUS
Forecasting Types Forecasting Product Status
Over Forecasting 70.00%
Under Forecasting 30.00%
Table 4.1.6 - Forecasting Product Status

30.00%
over forecasting
under forecasting

70.00%

Figure 4.1.6 - Forecasting Product Status

INFERENCE
From the above study - Out of 10 respondents, it’s interpreted that,
1. 70 percentage of the respondents prefer over forecasting than under forecasting since
under forecasted product creates a lot of problem in terms of customer satisfaction

2. 30 percentage of the products were under forecasted

4.1.7 - SELLING FORECASTING PRODUCT PERCENTAGE

Products Sell types Selling Forecasting Product Percentage

All The Products 40.00%

Limited Products 30.00%

Top Selling Products 30.00%

Table 4.1.7 - Selling Forecasting Product Percentage

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 45.00%
40.00%
40.00%
35.00%
30.00% 30.00%
30.00%
25.00%
20.00%
15.00%
10.00%
5.00%
0.00%
All the products Limited products Top selling products

Figure 4.1.7 - Selling Forecasting Product Percentage

INFERENCE
From the above study - Out of 10 respondents, it’s interpreted that,
1. Most of the respondents that is around 40 percentage of the respondent use forecasting for all
the products and then equal number of the respondents forecast only limited product and top
selling product.
2. 30 percentage of the respondents preferred with limited products
3. 30 percentage of the respondents preferred with top selling products on forecasting the selling
products

4.1.8 - SHOP VISIT - FREQUENCY STATUS

5 Scale Rating Response Shop Visit - Frequency Status
1 0%
2 5.41%
3 24.32%
4 43.24%
5 27.03%
Table 4.1.8 - Shop Visit - Frequency Status
50.00%
43.24%
40.00%

30.00% 27.03%
24.32%

20.00%

10.00% 5.41%

0.00%
2 3 4 5

Figure 4.1.8 - Shop Visit - Frequency Status

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INFERENCE
From the above study - Out of 10 respondents, it’s interpreted that,
1. On a scale of 5, 40 percentage (4 on 5) of the respondents are coming back to the shop
in a short interval of time.
2. Followed by the 30 percentage which is 3 on the scale.
3. There is no shop in which the customer won’t come back itself, every shop the customer
visited them in a short interval.

4.1.9 - PRODUCT PRIORITIZATION STATUS

Products Product prioritization Status

All the products 70.00%

Certain product 30.00%

Table 4.1.9 - Product prioritization Status

30.00%

All the products

Certain product

70.00%

Figure 4.1.9 - Product prioritization Status

INFERENCE
From the above study - Out of 10 respondents, it’s interpreted that,
1. 70 percent of the respondents give importance to all the products and not tend to focus
only on a single product.
2. Whereas 30 percent of the respondents focuses only on the certain product

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4.1.10 - PRODUCT LONG TERM FORECASTING STATUS
Response Product Long Term Forecasting Status
No 60.00%
yes 40.00%
Table 4.1.10 - Product Long Term Forecasting Status

40.00%
No
yes
60.00%

Figure 4.1.10 - Product Long Term Forecasting Status

INFERENCE
From the above study - Out of 10 respondents, it’s interpreted that,
1. Majority of the respondents have answered there is no long lead time and there is no
long term forecasting
2. 40 percentage of the respondents have answered yes for long term forecasting.

4.1.11 - PERISHABLE VS NON-PERISHABLE PERCENTAGE

Types Perishable Vs Non-Perishable Percentage

Nonperishable 70.00%

Perishable 30.00%

Table 4.1.11 - Perishable Vs Non-Perishable Percentage

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 30.00%

nonperishable
perishable

70.00%

Figure 4.1.11 - Perishable Vs Non-Perishable Percentage

INFERENCE
From the above study - Out of 10 respondents, it’s interpreted that,
1. 70 percentage of the respondents belongs to perishable category of inventory
requirement.
2. 30 percentage of the respondents belongs to perishable category of inventory
requirement.

4.1.12 - STOCK MAINTENANCE STATUS - DATA STORAGE

Response Stock Maintenance Status - Data Storage
No 10.00%
Yes 90.00%
Table 4.1.12 - Stock Maintenance Status - Data Storage

10.00%

No
Yes

90.00%

Figure 4.1.12 - Stock Maintenance Status - Data Storage

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INFERENCE
From the above study - Out of 10 respondents, it’s interpreted that,
1. Majority of the respondents have the data about the stocks and the current inventory
level up o date.
2. This shows that they are very well on line with managing the inventory level.

4.1.13 - STOCK SHORTAGE CHECK STATUS

Check Status Stock Shortage Check Status
By own self 10.00%
Through app 10.00%
Through employees 30.00%
Through some tracking software 50.00%
Table 4.1.13 - Stock Shortage Check Status

10.00%

10.00%

By own self
Through app
50.00%
Through employees
Through some tracking software

30.00%

Figure 4.1.13 - Stock Shortage Check Status

INFERENCE
From the above study - Out of 10 respondents, it’s interpreted that,
1. Most of the respondents that is around 50 percent of the respondents know that there is
a shortage in the stock through the app which they are using
2. 30 percent of the respondents know that there is a shortage in the stock through their
employees

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4.1.14 - PRODUCT BUYING STATUS
Buying Status Product Buying Status
Buy each product separately 30.00%
Buy the product after knowing the demand for the product 30.00%
Buy the product as a whole 40.00%
Table 4.1.14 - Product Buying Status

45.00%
40.00%
40.00%
35.00%
30.00% 30.00%
30.00%
25.00%
20.00%
15.00%
10.00%
5.00%
0.00%
Buy each product separately Buy the product after knowing the Buy the product as a whole
demand for the product

Figure 4.1.14 - Product Buying Status

INFERENCE
From the above study - Out of 10 respondents, it’s interpreted that,
1. 40 percent of the respondents buy the product as a whole and not as a single product
depending upon the sale of the product.
2. 30 percent of the respondents will buy the product only after knowing and analyzing
the demand of the product.
3. 30 percentage of the respondents will buy each and every product separately.

4.1.15 - PRODUCT FORECASTING PERCENTAGE

Response Product Forecasting Percentage
Maybe 30.00%
No 20.00%
Yes 50.00%
Table 4.1.15 - Product Forecasting Percentage

27
 30.00%

Maybe
No
50.00% Yes

20.00%

Figure 4.1.15 - Product Forecasting Percentage

INFERENCE
From the above study - Out of 10 respondents, it’s interpreted that,
1. 50 percent of the respondent s have under forecasted and over forecasted the product
2. 30 are not sure about it
3. 20 percent of the respondents have not forecasted

4.1.16 - UNDER FORECASTED PRODUCT - CUSTOMER REACTIONS

Ratings Customer Reactions
1 0
2 0
3 70.59%
4 0
5 29.41%
Table 4.1.16 - Under Forecasted Product - Customer Reactions

80.00% 70.59%

60.00%

40.00% 29.41%

20.00%

0.00%
3 5

Figure 4.1.16 - Under Forecasted Product - Customer Reactions

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INFERENCE
From the above study - Out of 10 respondents, it’s interpreted that,
1. 80 percentage of the customer reaction was neutral and they did not have any other
expectation about the availability of the stock in that particular retail shop.
2. 20 percentage of the customer were unsatisfied with the under forecasted product
because they had some kind of expectation that the shop will be having the product for
sure

4.1.17 - TOP SELLING PRODUCTS

Lists Top Selling Products Count
Charger case 1
Clothes 1
Dairy Products 1
Grains and Dals 1
Groceries 1
Kids Garments 1
Ladies Garments 1
LED lamps 1
Mobile 1
Mobile Gadgets 1
Table 4.1.17 - Top Selling Products

1.2

1 1 1 1 1 1 1 1 1 1
1

0.8

0.6

0.4

0.2

0
Charger Clothes Diary Grains and Groceries Kids Ladies LED lamps Mobile Mobile
case Products Dals Garmets Garments Gadgets

Figure 4.1.17 - Top Selling Products

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4.1.18 - WEATHER STATUS - SALES OF A PRODUCT
Response Weather Status - Sales of a Product
Maybe 10.00%
No 40.00%
Yes 50.00%
Table 4.1.18 - Weather Status - Sales of a Product

10.00%

Maybe
No
Yes
50.00%

40.00%

Figure 4.1.18 - Weather Status - Sales of a Product

INFERENCE
From the above study - Out of 10 respondents, it’s interpreted that,
1. 50 percentage of the respondent have said weather and seasons affect the sale and
inventory level
2. 40 percentage of the respondents have said no it won’t affect the sales and inventory
level
3. 10 percentage of the respondents are not sure with the answers

4.1.19 - PRODUCT STAYS IN INVENTORY STATUS

Week Counts Product Stays in Inventory Status
Less than one week 20.00%
less than Two weeks 10.00%
More than a Month 20.00%
More than two week but less than a month 50.00%
Table 4.1.19 - Product Stays in Inventory Status

30
 60.00%
50.00%
50.00%

40.00% Less than one week

30.00% less than Two weeks

20.00% 20.00% More than a Month
20.00%
10.00% More than two week
10.00% but less than a month

0.00%
Less than one week less than Two weeks More than a Month More than two week
but less than a month

Figure 4.1.19 - Product Stays in Inventory Status

INFERENCE
From the above study - Out of 10 respondents, it’s interpreted that,
1. 50 percentage of the respondents’ products stays in the inventory for more than two
weeks but less than a month.
2. 20 percentage of the respondents’ stocks stays more than a month
3. 20 percentage of the respondent’s stock stays less than a week
4. 10 percentage of the respondent stock stays less than two weeks

4.1.20 - ENVIRONMENTAL STATUS - AFFECT PERCENTAGE

Response Environmental Status - Affect Percentage
No 30.00%
Yes 70.00%
Table 4.1.20 - Environmental Status - Affect Percentage

30.00%

No
Yes

70.00%

Figure 4.1.20 - Environmental Status - Affect Percentage

31
INFERENCE
From the above study - Out of 10 respondents, it’s interpreted that,
1. 70 percentage of the respondents believe that they are affected by the external factors
like competitors and current macro-economic condition
2. 30 percent of the respondent s fell that they are not affected by the competitor and
macroeconomic condition

CHAPTER 5 – FINDINGS, SUGGESTIONS AND CONCLUSIONS

5.1 - FINDINGS
1. It is found that 40 percentage of the respondents are electronic shop owners and
followed by conventional and textile store with 30 percentage each.
2. 70 percent respondents will concentrate only on the product which the customer buys
more often.
3. Out of 10 respondents 40 percentage of the respondents influence the customer to buy
the product other than what they wanted to buy since they have already over forecasted
the product
4. 50% of the respondents renew the inventory only depending upon the sales and not on
any other factors.
5. 50% of the respondent’s current inventory level is medium and followed which high
and low
6. 70 percentage of the respondents prefer over forecasting than under forecasting since
under forecasted product creates a lot of problem in terms of customer satisfaction
7. Most of the respondents that is around 40 percentage of the respondent use forecasting
for all the products
8. On a scale of 5, 40 percent (4 on 5) of the respondents are coming back to the shop in
a short interval of time.
9. 70 percent of the respondents give importance to all the products and not tend to focus
only on a single product
10. Majority of the respondents have answered there is no long lead time and there is no
long-term forecasting and 40 percentage of the respondents have answered yes for long
term forecasting
11. 70 percentage of the respondents belongs to perishable category of inventory requirement.

32
 12. 40 percentage of the respondents are more likely to store a product for more than a
month
13. Majority of the respondents have the data about the stocks and the current inventory
level up to date.
14. Most of the respondents that is around 50 percent of the respondents know that there is
a shortage in the stock through the app which they are using
15. 40 percent of the respondents buy the product as a whole and not as a single product
depending upon the sale of the product.
16. 50 percent of the respondent s have under forecasted and over forecasted the product
and whereas 30 are not sure about it and 20 percent of the respondents have not
forecasted
17. 80 percentage of the customer reaction was neutral and they did not have any other
expectation about the availability of the stock in that particular retail shop.
18. 50 percentage of the respondent have said weather and seasons affect the sale and
inventory level
19. 50 percentage of the respondents’ products stays in the inventory for more than two
weeks but less than a month

5.2 - SUGGESTIONS
1. Maintaining accurate stock counts to know what are the products available on stock and
how many of each are available. If this information is not know it is impossible to place
accurate restock order.

2. Retail store inventory metrics can be understood by using point of scale system (pos).

3. Square for Retail: Square is one of the favorite low-cost cloud-based retail POS
system that allows to get real-time data, review reports, and set inventory alerts so that
running out if stock will be reduced to maximum extent.
a. Lightspeed: It is a cloud-based POS system that gives the unparalleled
inventory control and retail analytics (top POS inventory software). Lightspeed
is best for multiple location stores or those with a slightly higher budget

4. Logging the Product Data when the accurate receiving counts of everything. From
there, either through the POS system or manually, keeping a track each of the product

33
 line’s inventory levels with the sales to avoid stock outs, losses, and frustrated
customers.

5. Creating a Storage System to Avoid Losing Stock. Defining an organized and

implementable way to store your goods. Forgotten products shoved to the back of
displays or storeroom shelves result in unsold goods, miscounts, over-ordering, and
excess stock. All of this equals money lost for a small retailer.

5.3 – CONCLUSION

As it is evident that customer is now a day’s king of the market and his/her/their
satisfaction is the most important factor in every type/set-up of business, whether it is
organized or unorganized retail sector, whether it is small, medium or large-scale business
etc. Due to many changes in the lifestyle, purchasing power, easy loan through banks etc,
there is a shift in the satisfaction level of customer’s expectations. They evaluate every
small detail thoroughly and, inventory management technique is an important factor which
affects the shopping behavior and retailer’s margin. Retailer’s financial performance or
profitability is very much dependent on the customer satisfaction and to attain this they are
trying very hard using innovative or traditional inventory management techniques.

Training all staff on the use of electronic inventory systems as well as better service
delivery, listening to customers complaints, suggestions keenly, organize refresher courses
for managers, and supervisors are necessary to increase the effectiveness of service
delivery.

The retail owners should have a thorough knowledge about the stock level so that they
will know how much stock they want to satisfy the customer needs and wants. This is
directly proportional to the customer satisfaction. If the customer is unhappy with the
services or with the unavailability of the product then they are not going to come back to
shop and ultimately it is going to affect the sales of the company. So, keep track of right
amount of stock is very essential for the sales of the shop, sustainability of the shop in long
run and finally with the customer satisfaction.

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 CHAPTER 6 – APPENDICES

Questionnaire on Analysis of Retail Inventory Requirements

1. Since every item is nonperishable, how many days are you likely to store a product?
• Electronics
• conventional store (groceries, vegetables, fruits)
• clothing or textile

2. Do you concentrate only on the product which the customer buys more often?
• Yes
• No
• Maybe

3. Do you influence the customer to buy the product other than what they wanted to but
since you have over forecasted that product?
• Yes
• No
• Maybe

4. How often do you renew your inventory?

• once in a week
• once in a month
• once a quarter
• depending upon the sales

5. What is your current inventory level?

• Low
• Medium
• High

6. Do you prefer under or over forecasting of a product?

• over forecasting
• Under forecasting

7. DO you use forecasting foe all the products or only for the top selling products?
• Limited products
• Top selling products
• All the products

8. On a scale of 5 how often the customers are coming back to your shop?
• 1= Very rarely
• 2= Rarely
• 3= To some extent
• 4= Often

35
 • 5= Very Frequently
9. Do to tend to prioritize certain product or given importance to all the product?
• Certain product
• All the products
• None of the products

10. Is there any long lead time, that is are there any long term forecasting planned so far
and how did it go?
• Yes
• No

11. Do you have data about all the stocks and current inventory?
• Yes
• No
• Maybe

12. How do you know if there is a shortage of the stock?

• Through employees
• Through some tracking software
• Through app
• By own self

13. Do you buy the product as a whole or as a separate individual product depending on
how many pieces a customer wants?
• Buy the product as a whole
• Buy each product separately
• Buy the product after knowing the demand for the product

14. Have you ever under forecasted or over forecasted a product?

• Yes
• No
• Maybe

15. What is the customer reaction for the under forecasted product?
• 1=Very Disappointed
• 2= Disappointed
• 3= Neutral
• 4= Satisfied
• 5= Very satisfied

16. Approximately for how many days a product stays in the inventory?
• Less than a day
• Less than one week
• less than Two weeks
• More than two weeks but less than a month

36
 • More than a Month
17. Do weather or seasons affect the inventory and sales of the product?
• Yes
• No
• Maybe

18. Is your inventory affected by the external factors like competitors and current macro-
economic conditions?
• Yes
• No
19. Is your product perishable or non-perishable?
• Perishable
• Non Perishable

CHAPTER 7 – REFERENCES

• Chen H, Murray FZ, Wu OQ (2007) U.S. retail and wholesale inventory performance
from 1981 to 2004. Manufacturing Service Operations Management. 9(4):430–456.

• Eroglu C, Hofer C (2011) Lean, leaner, too lean? The inventory-performance link
revisited. Journal of Operations Management. Volume 29, Issue 4, May 2011, Pages
356-369

• U.S. Census Bureau (2019). Advance retail inventories: Retail (Excluding food
services) [ARINVTS], retrieved from FRED, Federal Reserve Bank of St. Louis;

• Winkler E (2018, July 19) Tariffs threaten retailers’ inventory discipline. The Wall
Street Journal.

• Thomas JK, Zhang H (2002). Inventory changes and future returns. Rev. Account. Stud.
7(2): 163-187.

• Kabak IW, Schiff AI (1978) Inventory models and management objectives. Sloan
Management Review 19(2): 53.

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• Adusei, C., & Awunyo-Vitor, D. (2014). Determinants of stock-out in retail shops in
Ghana: Evidence from Kumasi metropolis. Modern Economy, 5, 1240-1252.
doi:10.4236/me.2014.513115

• Aksoy, A., Ozturk, N., & Sucky, E. (2012). A decision support system for demand
forecasting in the clothing industry. International Journal of Clothing Science and
Technology, 24, 221-236. doi:10.1108/09556221211232829

• Bala, P. (2012). Improving inventory performance with clustering based demand

forecasts. Journal of Modelling in Management, 7, 23-37.
doi:10.1108/17465661211208794

• Chandel, S. J. (2014). Service quality and customer satisfaction in organized retail

sector in India. International Journal of Marketing and Technology, 4, 176-189

• Davis, R. (2014). Maximize ERP value with inventory optimization. Journal of

Business Forecasting, 33, 16-21.

• Li, M., & Zhang, J. (2012). Does inventory pooling improve customer service levels?
Operations Research Letters, 40, 96-98. doi:10.1016/j.orl.2011.12.003

• Osarenkhoe, A., & Komunda, B. (2013). Redress for customer dissatisfaction and its
impact on customer satisfaction and customer loyalty. Journal of Marketing
Development and Competitiveness, 7, 102-114

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