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MANAGING FRUITS AND VEGETABLES INVENTORY: A STUDY OF RETAIL STORES
Article · August 2015
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ISSN:2249-877X Vol. 5, Issue 8, August 2015 Impact Factor: SJIF 2013=4.748
P ublis he d b y: S out h A s ia n A c ade m ic R es e arc h J our nals
SAJMMR:
South Asian Journal of
Marketing & Management
Research
( A D o u b le B l i n d R e fe r e e d & R e v ie we d I nt e r na t io na l J o ur na l)
MANAGING FRUITS AND VEGETABLES INVENTORY:

A STUDY OF RETAIL STORES
Lamay Bin Sabir*; Prof. Jamal A.Farooquie**
*Senior Research Fellow,

Department of Business Administration,
AMU, Aligarh, India.
**Professor,
Department of Business Administration,
AMU, Aligarh, India.
ABSTRACT
Selling fruits and vegetables as perishable items need special consideration by

retailers keeping in mind different inventory management conditions which should
cater to the need of the customers. As shelf life of fruits and vegetables are less
therefore strategies for review, replenishment needs to be devised correctly. Also
managing and ordering such perishable products needs to be taken special care by
the retailers so that customer satisfaction can be achieved with less waste. This
paper presents a review and replenishment techniques followed by the retailers of
perishable items (fruits and vegetables). Also ordering policies followed by them are
discussed. How retailers manage their order size, time of order, how do review and
replenish their shelf etc. are some of the questions that are answered in this paper.
Only organized retail stores are considered who are selling fruits and vegetables
and have a retail outlet in Delhi-NCR.
KEYWORDS: Fruits and Vegetables, Inventory Management, Perishables, Retail

store.
______________________________________________________________________________
1. INTRODUCTION
Retailer and its associated services have a central role in the supply chain since they are the final
window for the customers. Retailers are the last link of the supply chain which is direct contact
with the final consumers. This is the most powerful link because it is the final window for the
customer for purchasing items. To collaborate and influence the suppliers, their information and
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47
managing systems are very much essential. To understand customer demand, marketing and
other strategies are also very important on the other hand. According to Trienekens et al. (2008),
it‟s all about moving perishable products from cold storage to shelf area to display.
As per Gulati and Reardon (2007), the organized food retail in India is growing very fast with an
annual rate between 16-50 percent in few years, which was started with a small base. This high
rate of growth will bound to have significant impacts on existing value chains directly or
indirectly. Review and replenishment of shelves are one of the most important aspect of
perishable food retailing. Retailers need to take care of this aspect since the time frame of
perishability is quite less in case of fresh fruits and vegetables. Also ordering perishable items is
the key to reduce waste. Retailers need to maintain trade off between too much and too little.
Too much inventory may result in waste and too little will make the customer satisfaction low.
Next section deals with a brief literature review, followed by the objectives and methodology
used in this paper. Then data analysis and interpretation is followed by conclusions and future
research directions.
2. LITERATURE REVIEW
Supply chain performance can be increased by decreasing the inventory levels and increasing the
fill rate i.e. replenishment, therefore such benefits to the retailers has resulted in increased use of
VMI over time (Emigh, J., 1999 as cited by Yao et. al., 2007). According to Yao et al. (2007),
VMI can be termed as collaborative initiative where vendors are authorized to manage the
inventory at buyer‟s end. The integration of operations between the vendors and buyers is the
key factor of VMI where information is shared on regular basis. Buyers can share information
regarding the sales and inventory levels etc. with the vendors in real time basis with the help of
EDI (Electronic Data Interchange) or other software. Vendors/suppliers can use this information,
which is shared by the buyer in real time basis, to plan their production, scheduled delivery
timings and the maintenance of inventory levels at their warehouse. Achabal et al. (2000) said
the VMI has the potential to reduce inventory levels and costs associated with inventory to
benefit both the suppliers a well as buyers. This also helps in improving customer attention and
providing better services to the consumer (Waller et al., 1999). Both suppliers and buyers are
experiencing such benefits, like Wal-Mart and its key supplier Proctor & Gamble.
Raghunathan and Yeh (2001) found that value of continuous replenishment programs affect the
characteristics of demand. They argued that when inventory reductions are there due to
continuous replenishment programs, demand variance increases. Woensel et al. (2007) also
stated performance measure are mostly influenced by the time of filling of shelf and then
replenishments during rest of the business day, the experience of the person who is doing all the
ordering for bakery bread and the consistence in assorting in day to day ordering processes of the
retail store. These measures were found by interviewing store personnel and by observing the
ordering process along with shelf stacking.
Other studies also emphasized on lowering stock out and its effect on performance measures
(Gruen et al., 2002; Karkkainen and Holmstrom, 2002). In another study Trienekens et al. (2008)
has taken European fruit supply chain where they developed conceptual framework for
assessment of innovation and performance of those companies. The framework developed

48
consisted of an innovation to performance matrix and a supply chain process model. There
model have been successfully applied in several cases along with apply chain in Netherlands
(Shukla and Jhakaria, 2013).
In another simulation study done by Routroy and Babusaheb (2010), has considered other
performance indicators in time dependent perishable product. To control the inventory, they
considered periodic review system where effective product shelf life is assumed to be seven days
only. Demand forecasting is an important aspect in perishable retail sales as the overall order
size, dynamic pricing etc. depends on how well forecasting is being done. There are many
techniques for forecasting the demand. Many authors (Wang, 2011; Hendrix et al., 2012; Badri,
1999; Bai & Kendall, 2008; Routroy & Prashant, 2010; Donselaar & Broekmeulen, 2012; Parlar
et al., 2011; Baron et al., 2010) have argued that demand cannot be deterministic rather
stochastic demand patterns are much closer to the real world scenario and hence should be taken
into consideration. Not many studies have been done where demand is stochastic following
unknown probability distribution. Many authors said that demand is assumed to be known in
advance, which helps in many calculations easier.
Majority of authors have considered shortages as one of the important factor for modelling the
perishable inventory. Some authors used a cost parameter for lost sales and/or backorders.
Models that assume complete backlogging are often less likely to be able to cater in real life
situations or conditions while models having partial backordering with predetermined value of
backordered items within each replenishment cycle are more likely to explain real life situations
(Bakker, M. et al. 2012). Such types of models are given by Chang et al. (2010), Mirzazadeh et
al. (2009), Olsson and Tydesjö, (2010); Roy and Maiti (2010).
Introduction to fresh supply chain management, demand forecasting and production planning
have gained most of the attention in the literature, while little attention towards inventory
management and transportation is addressed. Most of the studies are based upon demand
forecasting, production planning etc. All fruits and vegetables are considered as single product.
There seems to be a need in creating awareness across whole fresh supply chain in order to
increase efficiency and effectiveness. India, though being one of the biggest producers of fresh
produce, has paid little attention on fresh fruits and vegetables related research (Shukla &
Jhakaria, 2013).
3. OBJECTIVES AND METHODOLOGY
There is a dearth of research-based studies on Indian agri-food industry, its value chain dynamics
and competitiveness. The sector‟s unorganized nature makes it a major challenge for the research
community in terms of access to primary data (Shukla & Jharkharia, 2013). There is a scarcity of
literature regarding the policies and practices that are adopted by the retail stores in order to
manage fruits and vegetables inventory. In order to understand the management policies, in this
paper we identified and studied various policies and practices adopted by retail stores for
managing fruits and vegetable inventory along with review and replenishment practices followed
in the industry.

49
A structured questionnaire was developed in order to study the retail store policies. The
questionnaires for retailers have been administered personally. Some retailers chose to reply via
mail looking at the details of the questionnaire. Therefore mails were sent to them as asked. The
survey was conducted in Delhi-NCR. Delhi-NCR is selected purely based on convenience and
looking at the diversity and homogeneity of population also various players operating in the region
for organized retail segment like Reliance Fresh, More, Big Apple, Easyday etc. Initial sample size
was 160, out of which 97 retailers responded, thus having a response rate of around 60 percent. Out
of 97 responses, 8 were found to be incomplete and hence not considered in this study, reducing
the overall respondents, in case of retailers, to 89.
4. DATA ANALYSIS AND INTERPRETATION
The respondents were divided into three categories depending upon the kinds of F&V they deal
in their store. Here kinds of F&V means all the varieties are included for example, mango as a
fruit can be of many different varieties, and apple has at least 4 varieties and so on. As is evident
from Table 4.1, approximately 46% (41 out of 89) respondents are dealing with 81-100 kinds of
F&V in their store, whereas 38% and 16% are dealing in less than 80 and more than 100 kinds of
F&V respectively.
TABLE 4.1: RETAILERS PROFILE SELLING FRUITS AND VEGETABLES
Kinds of F&V
Statistics
< 80 81-100 > 100
No of stores 14 (16%) 41 (46%) 34 (38%)
4.1 REVIEW & REPLENISHMENT POLICIES
As per the objective of this paper; to study various dimensions for managing inventories of fruits
and vegetables. The very first dimension which was identified by literature was review policy.
Three questions were framed to understand the review policy being followed in retail stores.
Review policy is important because it helps in maintenance of perishable products and keeps
updates of the deteriorating effect of inventory in case of perishable products. Customers are
reluctant in buying F&V which are not fresh and in turn it damages the image of the store.
Questions were asked in order to analyze the review policy being followed in the retail stores.
Table 4.2 indicates that 64% (57 out of 89) retailers review the shelf on morning and evening
while 36% (32 out of 89) review the inventory on shelf periodically. We came to know that
reviewing periodically is not the preferred technique among retailers but depending upon the
company‟s policies, the Assistant/Floor manager can periodically analyze the inventory at shelf.
Time between periods of review can be 2 hrs, 4 hrs and 6 hrs depending on the judgment of the
floor manager. The customer arrival is also divided into two parts, first, morning arrivals, when
customers are few (before 7 p.m.) and second, evening arrivals, when most customers arrive
(after 7 p.m.). Evening arrivals of customers are more than morning arrivals because different
promotional schemes and discounting is done in this period only. Therefore, almost 64% retailers
review the shelf in morning and evening depending upon the footfall of the customers at
50
different times. Also, holidays and weekend traffic is also a main cause of reviewing the
inventory periodically.
TABLE: 4.2: INVENTORY REVIEW POLICY
Inventory Review Policy Basis of Replenishment

Statistics
Morning & evening
Review at shelf Other
Periodic (hourly) (fix time to review)
No of stores 32 (36%) 57 (64%) 85 (96%) 4 (4%)
Most of the time replenishment is done by reviewing at shelf level only. 96% retailers agreed
that reviewing at shelf is the most accurate way to analyze the inventory levels at shelf. They
supported their policy by adding the impact of „shrinkage‟ and theft which may lead to poor
availability and may sometimes lead to out of stock situation. 4% retailers (4 out of 89) said that
automated replenishment system (ARS) is followed for ordering the inventory and replenishing
the same as and when sales of the item takes place. Retailers argued that timely replenishment is
very important as it can lead to empty shelves; in spite the product is available at the store.
Another important aspect, shelf management, is covered by us when gaining insights about the
review policies for managing inventories of fruits and vegetables. Vendor managed inventory is
not at all preferred by retailers when it came to shelf management. 100% retailers, when asked
about shelf management for fruits and vegetables, preferred to maintain shelf and other
replenishment activities by themselves. Vendor managed inventory is not followed by any
retailer. This shows that retailers want complete control over shelves when it comes to short shelf
life products, F&V in this case.
TABLE 4.3: INVENTORY CLASSIFICATION
Inventory classification on
Classification store follows
the basis of shelf life
Statistics
Yes No shelf life 1-2 days Shelf life 2-4 days
No of stores 89 (100%) 0 89 (100%) 0
The classification followed in the store is purely on the basis of shelf life. A question was asked
regarding the classification followed in the retail store for fruits and vegetables. Table 4.3 shows
that 100% (89 out of 89) retailers classify their perishable inventory on the basis of shelf life. 100%
stores follow same classification i.e. they consider shelf life on the basis of 1-2 days only. This
may be the case because the customers always want fresh fruits and vegetables and the retailers
needs to get old inventory sold before placing fresh inventory on the shelf. This can only be done
when old inventory is sold and chances of overstocking are low.

51
4.2 MANAGING AND ORDERING
Managing and ordering the inventory, especially for short shelf life products, is always challenging
for the retailers at every stage of business. Improper ordering may lead to stock out/ overstock
conditions and chances of waste will be higher. Questions were asked related to managing and
ordering of fruits and vegetables from the store managers/keepers, to get the insight from their
point of view. It is also an important dimension of inventory management for perishables in retail
store. Proper ordering and managing the inventory will lead to more profit and less chances of
stock-out and/or overstock. Stock out is the situation where the customer wants to purchase a
particular product and the same is not available or available in less quantity than expected.
Similarly overstocking will lead to more stocks of F&V which always invite chances of waste and
ultimately loss to the retail store. From the interviews of the floor managers, in the pilot survey, we
identified that Point of sales (POS), Barcode reader (BR), Manager‟s judgment (MJ) and
Automatic replenishment system (ARS) are the most frequent used techniques in the industry for
managing Fruits and vegetables. Sometimes managers judgment is preferred vis-à-vis other
techniques because of the changing nature of the demand and seasonality.
Question was asked regarding the preferred inventory management technique the store follows.
This was a question where the respondent was allowed to mark more than one response for the
same. Therefore the overall total of no of stores went on higher side. As it is evident from Table
4.4, preferred management technique followed in most of the store (70%) is ARS. Automated
replenishment system allows the managers to take further decision on the size of the order. We
discussed with the managers and found that ARS can also order the product as per the demand
patters. Demand can be analyzed by looking at previous period sales of a week or a month.
Next important aspect in inventory ordering is manager‟s judgment. Since fruits and vegetables
have short shelf life and have an impact of seasonality also, therefore, managers prefer their own
judgment when it comes to ordering of F&V. This judgment is based on experience and ability to
manage the product depending upon the current resources of the retail store/shelf to maintain
freshness and nutrition value. 64% (57 out of 89), prefer the judgment of the manager in
managing the inventory.
This can be inferred from Table 4.4 that most preferred technique for inventory management
followed in the retail industry of F&V is ARS. After that manager‟s judgment is the most
preferred technique and data collected from POS and BR is least preferred. Retailers do not
usually prefer tagging the product into specific weights because of the nature of the product.
Retailers of F&V now use weight indicators both near the shelf and at the payment counter for
easy calculations. These responses indicate that ARS and manager‟s judgment are
simultaneously utilized when managing inventory having short shelf life.

52
TABLE 4.4: INVENTORY MANAGEMENT TECHNIQUES
Inventory management techniques Responses
Point Of Sales (POS) 38 (43%)
Barcode Reader (BR) 20 (22%)
Manager‟s Judgment (MJ) 57 (64%)
Automatic Replenishment System (ARS) 62 (70%)
Next question was asked about the basis of their ordering techniques. This question was also
given with the choice of selecting more than one answer. From Table 4.5, it is evident that ARS
should be the preferred management technique followed by the manager‟s room. Minimum order
quantity is the next preferred technique for ordering the inventory for fruits and vegetables with
66% managers relying on it. Ordering is also an important aspect of managing the inventories
pertaining to short shelf life products. Ordering the product will lead to proper management and
reduce overstocking which will reduce wastage/ throw away. More than one answer question
was asked about the basis of ordering F&V. As is evident from Table 4.5 shows 87% retailers
(77 out of 89) prefer previous period sales as the major criterion for ordering F&V. ARS and
Manual Ordering are the next preferred techniques for ordering fruits and vegetables with 83%
(74 out of 89) and 66% (59 out of 89) respectively.
Minimum order quantity of Vendor (VMOQ) is considered as the least preferred option for
ordering F&V inventory as the manager is not in total control of the size of order. Therefore
when no other option is left, VMOQ is the only choice. Since VMOQ may or may not be
appropriate as per the requirement of the retailer, therefore VMOQ is the last choice whenever
replenishment of inventory is done.
TABLE 4.5: BASIS OF ORDERING
Basis of Demand Forecasting Responses
Previous period sale (PPS) 77(87%)
MOQ of Vendor (VMOQ) 1 (1%)
Manual Orders 59 (66%)
Automatic Replenishment System (ARS) 74 (83%)
After analyzing the ordering and preferred managing technique for F&V, question was asked
about the purchase they do and the order size as per their MOQ. How much to order is always a
matter of concern for the retailer as it is totally dependent on the demand patterns. There are two

53
ways to order F&V, by minimum order quantity of vendor (VMOQ) and minimum order
quantity of retailer (RMOQ). Retailers need proper control of their order size so that they can
manage the inventory as per their understanding. But this is not the case always. Sometimes,
VMOQ is the dominant factor in ordering F&V. this can happen during end seasons when
vendor supplying F&V to the store may not deliver until retailers give order greater than their
minimum order size. In that case the retailer needs to maintain the shelf with excessive F&V‟s,
hence increasing the chances of waste, discounts and loss to the retailers. Another scenario is
when the vendor does not have the requested amount of order size, then again the retailer needs
to settle down with VMOQ, which may lead to stock out situations and hence affect the
credibility of the retailer in front of customers.
When retailers minimum order quantity is more than that of vendor, then this situation is
desirable for both the parties involved. Since the retailer must have done some homework before
ordering and they are getting the order size, also the vendor has no problem in supplying more
than their minimum order quantity. Therefore question was asked to analyze the no of times
RMOQ is higher than VMOQ. It will be helpful in understanding the overall control of the
ordering size of the retailer. Question was asked from the retailers to mark MOQ quantities
depending upon the average of the month. VMOQ and RMOQ is also categorize as low, medium
and high. Low MOQ means when the situation occurs 0-5 times in a month. Medium MOQ
means the situation occurs 6-15 times in a month. High MOQ means when the situation occurs
more than 15 times in a month. The question was framed with the inputs of experts from the field
which helped in finalizing the minimum and maximum values for the question. From Table 4.6,
it can be inferred that 53% retailers (47 out of 89) have less control over their ordering quantities
as compared to 47% (42 out of 89) who have more control.
TABLE 4.6: ORDER SIZE
RMOQ > VMOQ
Statistics < 15 times in a month > 15 times in a month
No of stores 47 (53%) 42 (47%)
Next question was asked to understand the supply source of F&V. 100% retailers agreed that they
procure F&V from vendors only and no retailer is in direct contact with the grower. Retailers
engage in contractual relationship with the vendors depending upon the location of stores.
After identifying the most preferred basis for ordering fruits and vegetables, next question is
asked about the order frequency and demand forecasting. This is another important aspect in
managing F&V inventory. Due to the seasonality and perishable nature of F&V, demand
forecasting needs to be done regularly. Table 4.7 suggests that 87% (77 out of 89) retailers carry
out demand forecasting on daily basis whereas remaining 13% (12 out of 89) retailers carry out
demand forecasting on alternate days. Frequency of ordering affects the overall order size and
needs to be done on daily or alternate basis. Almost every retailer 96% (85 out of 89) order F&V

54
on daily basis, therefore it is evident that frequency of ordering and demand forecasting has been
carried out on daily basis.
TABLE 4.7: FORECASTING & ORDER FREQUENCY
Frequency of Demand Forecast Order Frequency

Statistics
Daily Alternate days Daily Alternate days
No of stores 77 (87%) 12 (13%) 85 (96%) 4 (4%)
After carrying out demand forecasting and ordering, a question was asked about the lead time.
Lead time is calculated from the time of ordering and the stage at which the inventory is actually
places on the shelf. Since the actual purpose of F&V inventory is to sell fresh to the respective
customers and the deteriorating effect starts right from the time it left the field. Table 4.8 shows
that 62% of the times inventory lead time is 12-24 hours after the order have been placed. 24%
(21 out of 89) retailers have a lead time of 24-48 hours. This means that the F&V has already lost
the freshness level and it needs extra effort from the retailer side to maintain its freshness and
nutritious value. The delivery of F&V is done by vendors, store wise. Usually early morning
time is allocated for delivering F&V at retail stores, ending up maximum at 2:00 pm.
TABLE 4.8: LEAD TIME
Lead time
Statistics
0-6 hours 6-12 hours 12-24 hours 24-48 hours
No of stores 1 (1%) 12 (13%) 55 (62%) 21 (24%)
Due to the perishable nature of F&V, the floor managers have to consider every aspect of
demand forecasting so that ordering can be appropriate. It should not be less than the demand
which will give rise to a stock out situation, resulting in lost sales and customer‟s unwillingness
to go for substitute products. Also, the order size should not be greater than actual demand,
resulting in excess stock i.e. overstocking, and hence may result in more wastage. To reduce
wastage different promotional schemes such as discounts, can be a viable option for the retailers.
Therefore, order size, demand forecasting and ordering frequency along with lead time is
responsible for maintaining shelf and managing F&V efficiently.
In order to get insights on stock out and overstocking situations of a retailer, questions were
asked in a disguised form so that the manager may not hesitate in giving out the answers. For
stock out, it was asked about the number of times the customer demand is more than the stocked
quantity of the retailer in a month. For overstocking situations, the average closing inventory for
F&V was asked from the retailers on the basis of opening inventory. Since the manager note
down opening inventory on daily basis, therefore any excess inventory (overstock) is compared
with the opening inventory only. At the closing time, the manager is responsible for noting down

55
the remaining quantities for F&V which remained at shelf unsold. Also the wastage that is there
on the shelf needs to be disposed off before allowing fresh inventory to be placed on shelf.
The frequencies of stock out are divided into low (when 0-5% times stock out occurs in a
month), medium (5-10% times stock out occurs in a month) and high (when 10-15% times stock
out occurs in a month). Similarly, frequency of overstocking is divided into low (when excess
inventory is 0-5% times the opening inventory), medium (when excess inventory is 5-10% times
the opening inventory) and high (when excess inventory is 10-15% times the opening inventory).
TABLE 4.9: STOCK OUT AND OVERSTOCKING SITUATIONS
Stock out Overstock

Statistics
L M H L M H
No of stores 33 (37%) 34 (38%) 22 (25%) 34 (38%) 27 (30%) 28 (32%)
Table 4.9 shows that 62% (55 out of 89) retailers have 5-15% times stock out situations in their
retail store in a month, whereas 36% (32 out of 89) retailers face this situation less than 5% in a
month. When it comes to overstocking, 54% (48 out of 89) retailers face this situation and 39%
(35 out of 89) have lower frequency of overstocking.
5. CONCLUSIONS AND FUTURE RESEARCH DIRECTIONS
In this paper, we identified the actual practices followed in the retail industry for selling fruits
and vegetables. Inventory review policy that is mostly followed in the retail store selling F&V is
by reviewing in the morning and evening. The replenishment is done by reviewing the inventory
at shelf, which is followed by almost every retailer. For managing and ordering F&V, the most
reliable technique is Automatic replenishment system (ARS) followed by manager‟s judgment.
ARS and Manager‟s Judgment are important for managing and ordering fruits and vegetables.
Many times retailers rely on their own judgment to order and manage fruits and vegetables.
Therefore a possible combination of two techniques may be helpful in management of perishable
inventory better. Both techniques can be used in conjunction with the demand patterns. Seasonal
changes cannot be determined by ARS and therefore manual ordering may result in much better
ordering system. Majority of stores depends upon vendor minimum order quantity at least 15
times in a month. Retailers need to have gain more control over their ordering size and policies
so that they can manage inventories. Since vendor managed inventory will put additional burden
on the retailer therefore should manage ordering. Minimum order quantities should be in control
of retailers rather than vendors. Typically most of the store gets the ordered F&V from vendors
between 12-24 hours. That means the retailers need to access the demand beforehand so that
fresh inventory of F&V can be received before opening of the retail store. Lead time will not
only impact the shelf life of the product but also have an impact on waste, markdown policies
etc. This can be reduced by making local vendors/farmers accessible to the retailers. Stock out
and overstocking situations are common in all type of retail stores. Stock out and overstocking
are two opposite, yet important factors that contribute to retailer‟s performance. Almost every
store has stock out as well as overstocking condition at their stores. Retailers need to work upon
56
strategies to minimize both. Although in literature stock outs have been given much attention
than overstocking. Therefore overstocking needs special attention as dynamic pricing are used by
the retailers thereby reducing their profit margin. Overstocking also occupy shelf space, which
can be filled with fresh inventory if overstocking can be reduced. Generally retail stores are
following FIFO distribution technique. Future studies may find the impact of review and
replenishment policies and timing on various performance parameters of fruits and vegetable
retail. Also unorganized sector can be compared with organized sector in order to gain better
understanding of the retail services.
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16. Routroy, S., & Bhausaheb, N. A. (2010), “Evaluation of Inventory Performance for
Perishable Products Through Simulation”, The IUP Journal of Operations
Management, 9(1), 71-80.
17. Routroy, S., & Prashanth, T. (2010), “Evaluation of Inventory Performance for Perishable
Products in a Dynamic Pricing Environment”, The IUP Journal of Operations
Management, 9(3), 6-15.
18. Roy, A., & Maiti, M. (2010), “A volume flexible production-policy for randomly
deteriorating item with trended demand and shortages”, International Journal of Production
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of-the-art literature review”, International Journal of Operations & Production
Management, 33(2), 114-158.
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and performance in the fruit chain: The innovation-performance matrix”, British Food
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Springer Berlin Heidelberg.

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24. Yuliang Yao, Philip T. Evers, Martin E. Dresner (2007), “Supply chain integration in
vendor-managed inventory”, Decision Support Systems 43, 663– 674
APPENDIX I - RETAILER QUESTIONNAIRE
Please respond to the questions below with respect to your Fruits and Vegetables department
(FNV) only.
1. Approximately how many kinds of fruits and vegetables you deal with in your store
0-20 21-40 41-60 61-80 81-100 more than 100
2. Shelf inventory of fruits and vegetables is reviewed
Periodic Morning and evening Fix time to review _______
3. Who manages the inventory at shelf?
Vendor Retailer
4. How fruits and vegetables are replenished on the shelf?
By reviewing at shelf level Fixed time to replenish the shelf
Any other please specify _______________________
5. Do you classify fruits and vegetables on the basis of shelf life?
Yes No
6. If yes to Q2, how do you classify them?
Shelf life 1-2 days Shelf life 3-4 days Shelf life 5-6 days
Any other, ___________________
7. What is the preferred inventory management technique you employ in your store to manage
fruits and vegetables? (You may tick more than one)
POS (Point Of Sales) Barcode reader Manager‟s judgment
ARS (Automatic Replenishment System) Any other, please specify _____
8. On what basis do you order fruits and vegetables? (You may tick more than one)
Previous period sale MOQ of vendor Manual Orders
ARS (automatic replenishment system) Any other, please specify ____

59
9. How many times in a month your requirement of F&V exceeds the Vendor MOQ
1-5 times 6-10 times 11-15 times 16-20 times
10. Who are your suppliers of fruits and vegetables?
Grower Distributor/ Vendor
11. How often do you carry demand forecasting?
Hourly Daily Alternate days Any other, please specify ____
12. How frequently do you place orders for fruits and vegetables?
Hourly Daily Alternate days Any other, please specify ____
13. What is the difference between time of order and actual time of delivery?
0-6 hours 6-12 hours 12-24 hours 24-48 hours
14. How often customer demand is more than stocked quantity of fruits and vegetables in a
month?
0-5% 5-10% 10-15% More than 15%
15. What is the average closing inventory of fruits and vegetables in your retail store in a day?
0-5% of opening inventory 6-10% of opening inventory
11-15% of opening inventory > 15% of opening inventory

60
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MANAGING FRUITS AND VEGETABLES INVENTORY: A STUDY OF RETAIL STORES

Article · August 2015

Lamay Bin Sabir

Supplier Selection in SME's: A Fuzzy AHP Approach View project

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P ublis he d b y: S out h A s ia n A c ade m ic R es e arc h J our nals

MANAGING FRUITS AND VEGETABLES INVENTORY:

Lamay Bin Sabir*; Prof. Jamal A.Farooquie**

*Senior Research Fellow,

Selling fruits and vegetables as perishable items need special consideration by

KEYWORDS: Fruits and Vegetables, Inventory Management, Perishables, Retail

South Asian Academic Research Journals

3. OBJECTIVES AND METHODOLOGY

South Asian Academic Research Journals

4. DATA ANALYSIS AND INTERPRETATION

TABLE 4.1: RETAILERS PROFILE SELLING FRUITS AND VEGETABLES

No of stores 14 (16%) 41 (46%) 34 (38%)

4.1 REVIEW & REPLENISHMENT POLICIES

TABLE: 4.2: INVENTORY REVIEW POLICY

Inventory Review Policy Basis of Replenishment

No of stores 32 (36%) 57 (64%) 85 (96%) 4 (4%)

TABLE 4.3: INVENTORY CLASSIFICATION

No of stores 89 (100%) 0 89 (100%) 0

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4.2 MANAGING AND ORDERING

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TABLE 4.4: INVENTORY MANAGEMENT TECHNIQUES

Inventory management techniques Responses

Point Of Sales (POS) 38 (43%)

Barcode Reader (BR) 20 (22%)

Manager‟s Judgment (MJ) 57 (64%)

Automatic Replenishment System (ARS) 62 (70%)

TABLE 4.5: BASIS OF ORDERING

Basis of Demand Forecasting Responses

Previous period sale (PPS) 77(87%)

MOQ of Vendor (VMOQ) 1 (1%)

Manual Orders 59 (66%)

Automatic Replenishment System (ARS) 74 (83%)

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TABLE 4.6: ORDER SIZE

RMOQ > VMOQ

Statistics < 15 times in a month > 15 times in a month

No of stores 47 (53%) 42 (47%)

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TABLE 4.7: FORECASTING & ORDER FREQUENCY

Frequency of Demand Forecast Order Frequency

No of stores 77 (87%) 12 (13%) 85 (96%) 4 (4%)

TABLE 4.8: LEAD TIME

No of stores 1 (1%) 12 (13%) 55 (62%) 21 (24%)

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TABLE 4.9: STOCK OUT AND OVERSTOCKING SITUATIONS

Stock out Overstock

No of stores 33 (37%) 34 (38%) 22 (25%) 34 (38%) 27 (30%) 28 (32%)

5. CONCLUSIONS AND FUTURE RESEARCH DIRECTIONS

1. Badri, M. A. (1999), “A simulation model for multi-product inventory control

4. Baron, O. (2010), “Managing Perishable Inventory”, Wiley Encyclopedia of Operations

6. D. Achabal, S. Mclntyre, S. Smith, K. Kalyanam, (2000), “A decision support system for

9. J. Emigh, (1999), “Vendor-managed inventory”, Computerworld 33(34), 52.

South Asian Academic Research Journals

South Asian Academic Research Journals

APPENDIX I - RETAILER QUESTIONNAIRE

0-20 21-40 41-60 61-80 81-100 more than 100