The importance of inventory control in business increased dramatically with the shows how inventory control, with the help of OR, can be rationally structured. Inventory management is the branch of business management that covers the planning Different inventory management approaches are required for different . Inventory management mean methods that are used for organizing, Inventory control involves managing the inventory that is already in the.

Inventory Control Pdf

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PDF | On Mar 1, , Jim Freeman and others published Inventory Control and Management. Inventory systems answer the questions: when to order and how much to order. There are two categories: •Fixed-Order Quantity System. – an order of fixed. Prod Inventory Control. 0. Inventory Control. ⇒ When to order? ⇒ How many to order? Contents. 1. FRAMEWORK OF PLANNING.

The quantity of raw materials required will be determined by the rate of consumption and the time required for replenishing the supplies. The factors like the availability of raw materials and government regulations etc.

The raw materials enter the process of manufacture but they are yet to attain a final shape of finished goods. The quantum of work in progress depends upon the time taken in the manufacturing process.

The greater the time taken in manufacturing, the more will be the amount of work in progress.

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These materials do not directly enter production but they act as catalysts, etc. Consumables may be classified according to their consumption and criticality. The stock of finished goods provides a buffer between production and market. The purpose of maintaining inventory is to ensure proper supply of goods to customers.

The consumption pattern of raw materials, consumables, finished goods are different from that of spares.

The stocking policies of spares are different from industry to industry. Some industries like transport will require more spares than the other concerns. The costly spare parts like engines, maintenance spares etc.

It also exposes the firm to certain risks. The firm has, therefore, to arrange for additional funds to meet the cost of inventories.

The funds may be arranged from own resources or from outsiders. But in both cases, the firm incurs a cost. In the former case, there is an opportunity cost of investment while in later case the firm has to pay interest to outsiders. It is the cost of preparation and execution of an order, including cost of paper work and communicating with supplier.

There is always minimum cot involve whenever an order for replenishment of good is placed. The total annual cost of ordering is equal to cost per order multiplied by the number of order placed in a year. The stock out refer to demand for an item whose inventory level is reduced to zero and insufficient level. There is always a cost of stock out in the sense that the firm faces a situation of lost sales or back orders.

Stock out are quite often expensive. Holding of inventories also involves costs on storage as well as handling of materials.

Financial Management

The storage costs include the rental of the godown, insurance charge etc. Successfully reported this slideshow.

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Dr-Gourav Bharat. Gopal Das , No Downloads.Cycle counts X allow a business to count a small portion of the inventory every day to track the entire inventory.

Reasons for Inventory Control

Perhaps we should look for some broad evidence to see how successful they have been. Inventory management also notices about the presence of raw items that are availed in finishing orders.

When a tag is read, the data is recorded by the inventory management software. Material Management department. Which decisions are facilitated by an inventory model?

Maximizing Space

Some of these will be discussed in detail in the subsequent chapters. A discrete pdf defined as. References 2 SmallBusinessTown.