Inventory
Management
• Inventory is material that
the firm obtains in advance
of need, holds until it is
needed, and then uses,
consumes, incor...
Types of Inventories
 Raw
Material
Inventories
Types of Inventories
Work In
Process
Inventories
Types of Inventories
 Spare Part
Inventories
Types Of Inventories’
 Finished
Inventories
Cycle Stock and safety stock
•
Classification Of
Inventories Cost
 Purchase Cost
the cost
which the firm
pays to its
vendor.
Per /unit
Classification Of Inventories
Cost
 Ordering Cost
Cost incurred
whenever we order or
reorder the inventory.
Cost involved...
Classification Of Inventories Cost
 Holding cost
the cost that
accrue due to the
actual holding
of inventory over
a time ...
Classification Of Inventory
Cost
 Shortage Cost
This cost occurs
when there is
no inventory
Uses Of Inventory
•Time - The time lags present in the
supply chain, from supplier to user at
every stage, requires that y...
Uses Of Inventory
Uncertainty - Inventories are maintained as
buffers to meet uncertainties in demand, supply
and movement...
Uses Of Inventory
• Economies of scale - Ideal condition of "one
unit at a time at a place where a user needs it,
when he ...
Objectives Of Inventory
Control
• To ensure smooth flow of stock
Objectives Of Inventory
Control
• To provide the required quantity of material
Objectives Of Inventory
Control
To control Investment in stock
Objectives Of Inventory
Control
Protection against Fluctuating demand
Objectives Of Inventory
Control
Protection against Fluctuation in
output
Objectives Of Inventory
Control
Minimization Of Risk and Uncertainty
Objectives Of Inventory
Control
Risk Of Obsolescence
Objectives Of Inventory
Control
Minimization Of material Cost
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ITFT-- Inventory management

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about inventory management, concepts, applications, importance,objectives

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ITFT-- Inventory management

  1. 1. Inventory Management
  2. 2. • Inventory is material that the firm obtains in advance of need, holds until it is needed, and then uses, consumes, incorporates into a product, sells or otherwise disposes it of .
  3. 3. Types of Inventories  Raw Material Inventories
  4. 4. Types of Inventories Work In Process Inventories
  5. 5. Types of Inventories  Spare Part Inventories
  6. 6. Types Of Inventories’  Finished Inventories
  7. 7. Cycle Stock and safety stock •
  8. 8. Classification Of Inventories Cost  Purchase Cost the cost which the firm pays to its vendor. Per /unit
  9. 9. Classification Of Inventories Cost  Ordering Cost Cost incurred whenever we order or reorder the inventory. Cost involved in processing the order e.g administrative cost
  10. 10. Classification Of Inventories Cost  Holding cost the cost that accrue due to the actual holding of inventory over a time period.
  11. 11. Classification Of Inventory Cost  Shortage Cost This cost occurs when there is no inventory
  12. 12. Uses Of Inventory •Time - The time lags present in the supply chain, from supplier to user at every stage, requires that you maintain certain amounts of inventory to use in this "lead time."
  13. 13. Uses Of Inventory Uncertainty - Inventories are maintained as buffers to meet uncertainties in demand, supply and movements of goods.
  14. 14. Uses Of Inventory • Economies of scale - Ideal condition of "one unit at a time at a place where a user needs it, when he needs it" principle tends to incur lots of costs in terms of logistics. So bulk buying, movement and storing brings in economies of scale, thus inventory.
  15. 15. Objectives Of Inventory Control • To ensure smooth flow of stock
  16. 16. Objectives Of Inventory Control • To provide the required quantity of material
  17. 17. Objectives Of Inventory Control To control Investment in stock
  18. 18. Objectives Of Inventory Control Protection against Fluctuating demand
  19. 19. Objectives Of Inventory Control Protection against Fluctuation in output
  20. 20. Objectives Of Inventory Control Minimization Of Risk and Uncertainty
  21. 21. Objectives Of Inventory Control Risk Of Obsolescence
  22. 22. Objectives Of Inventory Control Minimization Of material Cost

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