Stores must "inventory" products ahead of sales and "forecast" (or estimate) which products customers will purchase (when and how much) to establish appropriate inventory levels for the various products they carry. What the stores are doing is called inventory management and sales forecasting. Not a simple task, considering that a grocery store carries as many as 30,000 different items, many of which are perishable foods with a very short shelf life. Due to the complexity of managing inventory and forecasting sales, companies are increasingly using computer systems to control their inventory.
In this unit, we will explore a number of issues related to inventory replenishment, distribution and transportation. More specifically, we will see how a retail store such as Safeway figures out its inventory, places an order and transports its goods from the warehouse.