Inventory Control
INVENTORY CONTROL
Inventory is any stock of economic resources that is stored for future us e it is commonly used to store materials, in process packing materials, spares etc, stocked in order to meet respected demand or distribution in the future.
Although inventory of any materials is an idle resources the sense, it is not meant for immediate use. It is necessary to maintain some inventories lot the smooth functioning f the organization.
Inventories are essential:
1. For adequate customer service. . .
2.. To take advantage of price discounts by bulk purchasing. ...
3. To make possible economics in. transportation and clearing & forwarding charges.
4. To maintain service stocks while replacement stocks are in transit.
5. To serve as a buffer in case of shop rejections and delayed deliveries.
6. To maintain smooth supply chain.
Demerits of excess inventory
1. Lock up of capital..
2. Cost involved in carrying inventory, storage place, personnel, records etc.
3. Risk of deterioration.
4. Risk of obsolescence- model changes.
5. Changes in price & in flow, or loss.
6.Loss or pilferage
Inventory control and its advantages
1. Keeping investment low
2. Ensures timely availability. .
3. Allows full advantage of economics.
4. Reduces stock out chances.
Types and examples of inventories: .
Several types of inventories -are maintained by the organizations. Some of the major inventories are .
1. Raw materials inventory .
2. Finished goods Inventory
3. Semi finished goods Inventory. . .
4. Spare parts and supplies Inventory
Inventory functions
The following is the list of the major reasons for maintaining Inventory
a) Protect against irregular demand: Inventories are kept to meet fluctuating demand.
b) Protect against irregular supply: a strike by the suppliers employees is one reason why deliveries may not teach on time. Lacks of materials at supplier’s level, strikes in transportation network are other possible reasons for delays in supply.
Inventory is any stock of economic resources that is stored for future us e it is commonly used to store materials, in process packing materials, spares etc, stocked in order to meet respected demand or distribution in the future.
Although inventory of any materials is an idle resources the sense, it is not meant for immediate use. It is necessary to maintain some inventories lot the smooth functioning f the organization.
Inventories are essential:
1. For adequate customer service. . .
2.. To take advantage of price discounts by bulk purchasing. ...
3. To make possible economics in. transportation and clearing & forwarding charges.
4. To maintain service stocks while replacement stocks are in transit.
5. To serve as a buffer in case of shop rejections and delayed deliveries.
6. To maintain smooth supply chain.
Demerits of excess inventory
1. Lock up of capital..
2. Cost involved in carrying inventory, storage place, personnel, records etc.
3. Risk of deterioration.
4. Risk of obsolescence- model changes.
5. Changes in price & in flow, or loss.
6.Loss or pilferage
Inventory control and its advantages
1. Keeping investment low
2. Ensures timely availability. .
3. Allows full advantage of economics.
4. Reduces stock out chances.
Types and examples of inventories: .
Several types of inventories -are maintained by the organizations. Some of the major inventories are .
1. Raw materials inventory .
2. Finished goods Inventory
3. Semi finished goods Inventory. . .
4. Spare parts and supplies Inventory
Inventory functions
The following is the list of the major reasons for maintaining Inventory
a) Protect against irregular demand: Inventories are kept to meet fluctuating demand.
b) Protect against irregular supply: a strike by the suppliers employees is one reason why deliveries may not teach on time. Lacks of materials at supplier’s level, strikes in transportation network are other possible reasons for delays in supply.