Posted in Marketing and Strategy Terms, Total Reads: 147
Definition: Never-Out List
Never-out list is a term used in marketing which signifies those products which are always kept in buffer stock by the retailers. This mentality is driven by the fact that if the product goes out of stock then the consumer may have to return empty handed and they may not like the same. Retailers keep these products in stock as they are best-selling items and are a favorite with the customers.
Never out list generally imparts a psychological advantage to the retailers as they are assured that they won’t run out of stock and hence can be sure that their customer would be satisfied.
Disadvantage of Never out list
Never out List has a disadvantage that it may lead to bullwhip effect. This may be because the retailer overestimates the no of good required at his side and this effect is translated further in the supply chain. This may lead to an accumulation of inventory and further trapping of capital. This needs to be taken care of during the whole course of Supply chain.