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B.E. MECH A VII Prepared by: Bhushan V. Tawade.
Subject: PPC Guided by prof. R. M. Parhe.
1. Introduction
2. Types of inventory models
3. Advantages
4. Disadvantages
5. Examples
 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 placed.
 Raw materials
 Purchased parts
 Components
 Subassemblies
 Work-in-process
 Finished goods
 To stabilise production.
 To take advantage of price discounts.
 To meet the demand during the
replenishment period.
 To prevent loss of orders(sales).
 To keep pace with changing market
conditions.
Inventory control aims at keeping track of
inventories. In other words, inventories of good
quality and right quantities should be made
available to different departments as and when
they needed.
 Simple EOQ model.
 EOQ model with stock outs allowed.
 Inventory model under risk.
 Improves the accuracy of inventory orders.
 Leads to a more organized warehouse.
 Helps save time and money.
 Ensures smooth production operations by maintaining
reasonable stocks of materials.
 Increases efficiency and productivity.
 Keeps your customers coming back for more.
 Most inventory control software program apps cost extremely
high.
 Price is definitely an issue for small and medium sized
businesses.
 Efficient inventory control methods can reduce but cannot
eliminate business risk.
Types of Inventory Models and Their Advantages & Disadvantages

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Types of Inventory Models and Their Advantages & Disadvantages

  • 1. B.E. MECH A VII Prepared by: Bhushan V. Tawade. Subject: PPC Guided by prof. R. M. Parhe.
  • 2. 1. Introduction 2. Types of inventory models 3. Advantages 4. Disadvantages 5. Examples
  • 3.  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 placed.
  • 4.  Raw materials  Purchased parts  Components  Subassemblies  Work-in-process  Finished goods
  • 5.  To stabilise production.  To take advantage of price discounts.  To meet the demand during the replenishment period.  To prevent loss of orders(sales).  To keep pace with changing market conditions.
  • 6. Inventory control aims at keeping track of inventories. In other words, inventories of good quality and right quantities should be made available to different departments as and when they needed.
  • 7.  Simple EOQ model.  EOQ model with stock outs allowed.  Inventory model under risk.
  • 8.
  • 9.
  • 10.
  • 11.  Improves the accuracy of inventory orders.  Leads to a more organized warehouse.  Helps save time and money.  Ensures smooth production operations by maintaining reasonable stocks of materials.  Increases efficiency and productivity.  Keeps your customers coming back for more.
  • 12.  Most inventory control software program apps cost extremely high.  Price is definitely an issue for small and medium sized businesses.  Efficient inventory control methods can reduce but cannot eliminate business risk.