SKU Rationalization a Technique for Inventory Optimization in the Retail Sector

Inventory is one of the most significant investments in the retail sector. A $4.0B arts and craft specialty retailer may hold up to $0.9B of inventory while a $45B pharmacy retailer may invest as much as $8.5B in inventory. Therefore, in order to maximize the Return On Investment (ROI), every retailer should ensure that extraneous inventory investments are kept to the minimum. Facts confirm that up to 35-40% of the total inventory is stuck in the non-performing, slow moving Stock Keeping Units (SKUs), whose cumulative contribution to sales is less than 5%. This phenomenon is known as the long tail of the supply chain.

Provided by: TCR Engineering Services Topic: Big Data Date Added: Mar 2012 Format: PDF

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