Inventory Management
By- CHAMWAD S L
ROLL NO.11
Definitions
 Inventory-A physical resource that a firm
holds in stock with the intent of selling it
or transforming it in...
Inventory
 Def. - A physical resource that a firm
holds in stock with the intent of selling
it or transforming it into a ...
Reasons for Inventories:-
 Improve customer service
 Economies of purchasing
 Economies of production
 Transportation ...
Nature of Inventory: Adding
Value through Inventory
 Quality - inventory can be a “buffer” against
poor quality; converse...
Objectives of Inventory
Control
 Maximize the level of customer
service by avoiding under stocking.
 Promote efficiency ...
Design of Inventory Mgmt.
Systems: Macro Issues
 Need for Finished Goods Inventories
◦ Need to satisfy internal or extern...
Design of Inventory Mgmt.
Systems: Micro Issues
 Order Quantity
Economic Order Quantity
 Order Timing
Reorder Point
Zero Inventory
 Reducing amounts of raw materials
and purchased parts and
subassemblies by having suppliers
deliver them ...
Inventory Positions in the Supply
Chain
Raw
Materials
Works
in
Process
Finished
Goods
Finished
Goods
in Field
!!!!THANK YOU!!!!
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Inventory management

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Inventory management

  1. 1. Inventory Management By- CHAMWAD S L ROLL NO.11
  2. 2. Definitions  Inventory-A physical resource that a firm holds in stock with the intent of selling it or transforming it into a more valuable state.  Inventory System- A set of policies and controls that monitors levels of inventory and determines what levels should be maintained, when stock should be replenished, and how large orders should be
  3. 3. Inventory  Def. - A physical resource that a firm holds in stock with the intent of selling it or transforming it into a more valuable state.  Raw Materials  Works-in-Process  Finished Goods  Maintenance, Repair and Operating (MRO)
  4. 4. Reasons for Inventories:-  Improve customer service  Economies of purchasing  Economies of production  Transportation savings  Hedge against future  Unplanned shocks (labor strikes, natural disasters, surges in demand, etc.)  To maintain independence of supply chain
  5. 5. Nature of Inventory: Adding Value through Inventory  Quality - inventory can be a “buffer” against poor quality; conversely, low inventory levels may force high quality  Speed - location of inventory has gigantic effect on speed  Flexibility - location, level of anticipatory inventory both have effects  Cost - direct: purchasing, delivery, manufacturing indirect: holding, stock out. HR systems may promote this-3 year postings
  6. 6. Objectives of Inventory Control  Maximize the level of customer service by avoiding under stocking.  Promote efficiency in production and purchasing by minimizing the cost of providing an adequate level of customer service.
  7. 7. Design of Inventory Mgmt. Systems: Macro Issues  Need for Finished Goods Inventories ◦ Need to satisfy internal or external customers? ◦ Can someone else in the value chain carry the inventory?  Ownership of Inventories  Specific Contents of Inventories  Locations of Inventories  Tracking
  8. 8. Design of Inventory Mgmt. Systems: Micro Issues  Order Quantity Economic Order Quantity  Order Timing Reorder Point
  9. 9. Zero Inventory  Reducing amounts of raw materials and purchased parts and subassemblies by having suppliers deliver them directly.  Reducing the amount of works-in process by using just-in-time production.  Reducing the amount of finished goods by shipping to markets as soon
  10. 10. Inventory Positions in the Supply Chain Raw Materials Works in Process Finished Goods Finished Goods in Field
  11. 11. !!!!THANK YOU!!!!
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