This ppt is about what is Inventory management and a case study on NANDYALA CEMENT BRICKS(Small scale Industry). And here we used EOQ and ABC analysis techniques.
This ppt is about what is Inventory management and a case study on NANDYALA CEMENT BRICKS(Small scale Industry). And here we used EOQ and ABC analysis techniques.
Concept of inventory, need for inventory, types of inventory, Seasonal, Decoupling, Cyclic, Pipeline, Safety, Implications of Inventory Control Methods Inventory Costs: Concept & Behavior of Ordering cost, Carrying cost & Shortage cost Basic EOQ Model & EOQ with Discount
Kattareeya Prompreing
白雅欣
iD:DA61G209
(Student in Ph.D. Business and Management, College Business, STUST
email:da61g209@stust.edu.tw
: katt.rmutl@gmail.com
INVENTORY MODELS
One basic problem of
inventory management is to find
out the order quantity so that it
is most economical from overall operational point of view. Here that problem lies in minimizing the two conflicting costs, i.e. ordering cost and inventory carrying cost.
Inventory models help to find out the order quantity which minimizes the total costs(sum of ordering costs and inventory carrying costs).
Concept of inventory, need for inventory, types of inventory, Seasonal, Decoupling, Cyclic, Pipeline, Safety, Implications of Inventory Control Methods Inventory Costs: Concept & Behavior of Ordering cost, Carrying cost & Shortage cost Basic EOQ Model & EOQ with Discount
Kattareeya Prompreing
白雅欣
iD:DA61G209
(Student in Ph.D. Business and Management, College Business, STUST
email:da61g209@stust.edu.tw
: katt.rmutl@gmail.com
INVENTORY MODELS
One basic problem of
inventory management is to find
out the order quantity so that it
is most economical from overall operational point of view. Here that problem lies in minimizing the two conflicting costs, i.e. ordering cost and inventory carrying cost.
Inventory models help to find out the order quantity which minimizes the total costs(sum of ordering costs and inventory carrying costs).
Warehouse Operations and Inventory Management Thomas Tanel
Companies that make the best use of the basic principles of planning and managing warehouse operations and inventory management have a competitive advantage. Organizations that lack warehouse strategic planning and inventory operational excellence lose profits, market share, cost advantages, and market leadership.
Traditional Supply Chain and Logistics channels are indeed changing. As organizations move from mass production and mass distribution to mass customization, creative approaches are needed in the management of warehousing and inventory. The challenge is always present, because different customers may demand different levels of service. Demand often cannot be forecasted, especially if one must deliver customized products or services exactly where the customer needs them.
Businesses today must understand that they are competing on the basis of time more than on any other factor. The rigors of supply chain management require that you take action to meet your customers’ demand for faster, more frequent, and more reliable deliveries. Your suppliers need to meet increasingly precise inbound schedules. Tomorrow’s customers are more likely to be in another country or continent than they are likely to be from across town, in another state, or in another province.
With a proven inventory management system and an A-B-C Analysis, you can transform your inventory into a proactive force that lowers your inventory investment, reduces carrying costs, boosts confidence in physical supply and distribution service levels, and increases customer and user satisfaction. From a storage and distribution perspective, you, as overseer of the supply management process, should also know how the warehousing layout design criteria and the space and storage schemes affect your material flow, service levels, computerization, and technology options.
Recording of Special Transactions of Accounting in Saparate books, includes :
1."Cash Book" for Cash, Bank & Discount transactions
2. "Purchase Book" for Credit purchases of goods
3. "Returns Outward Book" for Return of Credit purchases goods
4. "Sales Book" : Credit Sale of goods
5."Return Inwards Book" for Return of Credit Sold goods; 6. "Bills Receivable" book: Details of Bills drawn &
7. "Bills Payable" Book.
8. "Journal Proper": for the remaining Transactions.
For more information visit - http://www.takshilalearning.com or call +91-8800999280
The challenges that confront Steel industry in the age of globalization are complex in nature. The secret of sustainable turnaround lies in how steel industry faces the challenges and develops combative and anticipatory process. Most of the Problem can be solved by adopting and modifying their Operational Management strategy.
This presentation includes:
What is inventory?
Cost calculation of inventory
Cost formula
The objective of inventory management
Different methods of inventory cost calculation with examples
Inventory management refers to the process of ordering, storing, using, and selling a company's inventory. This includes the management of raw materials, components, and finished products, as well as warehousing and processing of such items. There are different types of inventory management, each with its pros and cons, depending on a company’s needs.
The Benefits of Inventory Management
A company's inventory is one of its most valuable assets. In retail, manufacturing, food services, and other inventory-intensive sectors, a company's inputs and finished products are the core of its business. A shortage of inventory when and where it's needed can be extremely detrimental.
At the same time, inventory can be thought of as a liability (if not in an accounting sense). A large inventory carries the risk of spoilage, theft, damage, or shifts in demand. Inventory must be insured, and if it is not sold in time it may have to be disposed of at clearance prices—or simply destroyed.
For these reasons, inventory management is important for businesses of any size. Knowing when to restock inventory, what amounts to purchase or produce, what price to pay—as well as when to sell and at what price—can easily become complex decisions. Small businesses will often keep track of stock manually and determine the reorder points and quantities using spreadsheet (Excel) formulas. Larger businesses will use specialized enterprise resource planning (ERP) software. The largest corporations use highly customized software as a service (SaaS) applications.
Appropriate inventory management strategies vary depending on the industry. An oil depot is able to store large amounts of inventory for extended periods of time, allowing it to wait for demand to pick up. While storing oil is expensive and risky—a fire in the U.K. in 2005 led to millions of pounds in damage and fines—there is no risk that the inventory will spoil or go out of style.
1
For businesses dealing in perishable goods or products for which demand is extremely time-sensitive—2021 calendars or fast-fashion items, for example—sitting on inventory is not an option, and misjudging the timing or quantities of orders can be costly.
For companies with complex supply chains and manufacturing processes, balancing the risks of inventory glut and shortages is especially difficult. To achieve these balances, firms have developed several methods for inventory management, including just-in-time (JIT) and materials requirement planning (MRP).
Inventory control is the processes employed to maximize a company's use of inventory & Depreciation is the systematic reduction in the recorded cost of a fixed asset.
Final Research Project Synopsis ppt for viva : Islamic Banking in IndiaAJ Raina
This ppt is based on the synopsis for the Final Research Project on the topic related to relevance, feasibility and scope of Islamic Banking in Indian Context by a student of Era Business School, New Delhi-78
PART ANALYSIS OF CHAPTER NO 3 : BROADENING ACCESS TO FINANCE (From the Study ...AJ Raina
PART ANALYSIS OF CHAPTER NO 3 : BROADENING ACCESS TO FINANCE
(From the Study Report titled, “A Hundred Small Steps”) by students of Era Business School, New Delhi (PGDM 2012-14)
A short description of a tea manufacturer's business process from the point of view of Management Information System; PGDM batch 2012-14 of Era Business School
Case Study on GETTING AIRLINES ALLIANCES OFF THE GROUNDAJ Raina
This case study on GETTING AIRLINES ALLIANCES OFF THE GROUND (International Business) was prepared by the students of Era Business School, New Delhi (PGDM 2012-14 batch)
Usage situation has an importance of its own in consumer behaviour ; with beer as a product, the ppt from a student of Era Business School, tries to explain the issue.
Falcon stands out as a top-tier P2P Invoice Discounting platform in India, bridging esteemed blue-chip companies and eager investors. Our goal is to transform the investment landscape in India by establishing a comprehensive destination for borrowers and investors with diverse profiles and needs, all while minimizing risk. What sets Falcon apart is the elimination of intermediaries such as commercial banks and depository institutions, allowing investors to enjoy higher yields.
Personal Brand Statement:
As an Army veteran dedicated to lifelong learning, I bring a disciplined, strategic mindset to my pursuits. I am constantly expanding my knowledge to innovate and lead effectively. My journey is driven by a commitment to excellence, and to make a meaningful impact in the world.
[Note: This is a partial preview. To download this presentation, visit:
https://www.oeconsulting.com.sg/training-presentations]
Sustainability has become an increasingly critical topic as the world recognizes the need to protect our planet and its resources for future generations. Sustainability means meeting our current needs without compromising the ability of future generations to meet theirs. It involves long-term planning and consideration of the consequences of our actions. The goal is to create strategies that ensure the long-term viability of People, Planet, and Profit.
Leading companies such as Nike, Toyota, and Siemens are prioritizing sustainable innovation in their business models, setting an example for others to follow. In this Sustainability training presentation, you will learn key concepts, principles, and practices of sustainability applicable across industries. This training aims to create awareness and educate employees, senior executives, consultants, and other key stakeholders, including investors, policymakers, and supply chain partners, on the importance and implementation of sustainability.
LEARNING OBJECTIVES
1. Develop a comprehensive understanding of the fundamental principles and concepts that form the foundation of sustainability within corporate environments.
2. Explore the sustainability implementation model, focusing on effective measures and reporting strategies to track and communicate sustainability efforts.
3. Identify and define best practices and critical success factors essential for achieving sustainability goals within organizations.
CONTENTS
1. Introduction and Key Concepts of Sustainability
2. Principles and Practices of Sustainability
3. Measures and Reporting in Sustainability
4. Sustainability Implementation & Best Practices
To download the complete presentation, visit: https://www.oeconsulting.com.sg/training-presentations
Unveiling the Secrets How Does Generative AI Work.pdfSam H
At its core, generative artificial intelligence relies on the concept of generative models, which serve as engines that churn out entirely new data resembling their training data. It is like a sculptor who has studied so many forms found in nature and then uses this knowledge to create sculptures from his imagination that have never been seen before anywhere else. If taken to cyberspace, gans work almost the same way.
Accpac to QuickBooks Conversion Navigating the Transition with Online Account...PaulBryant58
This article provides a comprehensive guide on how to
effectively manage the convert Accpac to QuickBooks , with a particular focus on utilizing online accounting services to streamline the process.
"𝑩𝑬𝑮𝑼𝑵 𝑾𝑰𝑻𝑯 𝑻𝑱 𝑰𝑺 𝑯𝑨𝑳𝑭 𝑫𝑶𝑵𝑬"
𝐓𝐉 𝐂𝐨𝐦𝐬 (𝐓𝐉 𝐂𝐨𝐦𝐦𝐮𝐧𝐢𝐜𝐚𝐭𝐢𝐨𝐧𝐬) is a professional event agency that includes experts in the event-organizing market in Vietnam, Korea, and ASEAN countries. We provide unlimited types of events from Music concerts, Fan meetings, and Culture festivals to Corporate events, Internal company events, Golf tournaments, MICE events, and Exhibitions.
𝐓𝐉 𝐂𝐨𝐦𝐬 provides unlimited package services including such as Event organizing, Event planning, Event production, Manpower, PR marketing, Design 2D/3D, VIP protocols, Interpreter agency, etc.
Sports events - Golf competitions/billiards competitions/company sports events: dynamic and challenging
⭐ 𝐅𝐞𝐚𝐭𝐮𝐫𝐞𝐝 𝐩𝐫𝐨𝐣𝐞𝐜𝐭𝐬:
➢ 2024 BAEKHYUN [Lonsdaleite] IN HO CHI MINH
➢ SUPER JUNIOR-L.S.S. THE SHOW : Th3ee Guys in HO CHI MINH
➢FreenBecky 1st Fan Meeting in Vietnam
➢CHILDREN ART EXHIBITION 2024: BEYOND BARRIERS
➢ WOW K-Music Festival 2023
➢ Winner [CROSS] Tour in HCM
➢ Super Show 9 in HCM with Super Junior
➢ HCMC - Gyeongsangbuk-do Culture and Tourism Festival
➢ Korean Vietnam Partnership - Fair with LG
➢ Korean President visits Samsung Electronics R&D Center
➢ Vietnam Food Expo with Lotte Wellfood
"𝐄𝐯𝐞𝐫𝐲 𝐞𝐯𝐞𝐧𝐭 𝐢𝐬 𝐚 𝐬𝐭𝐨𝐫𝐲, 𝐚 𝐬𝐩𝐞𝐜𝐢𝐚𝐥 𝐣𝐨𝐮𝐫𝐧𝐞𝐲. 𝐖𝐞 𝐚𝐥𝐰𝐚𝐲𝐬 𝐛𝐞𝐥𝐢𝐞𝐯𝐞 𝐭𝐡𝐚𝐭 𝐬𝐡𝐨𝐫𝐭𝐥𝐲 𝐲𝐨𝐮 𝐰𝐢𝐥𝐥 𝐛𝐞 𝐚 𝐩𝐚𝐫𝐭 𝐨𝐟 𝐨𝐮𝐫 𝐬𝐭𝐨𝐫𝐢𝐞𝐬."
What are the main advantages of using HR recruiter services.pdfHumanResourceDimensi1
HR recruiter services offer top talents to companies according to their specific needs. They handle all recruitment tasks from job posting to onboarding and help companies concentrate on their business growth. With their expertise and years of experience, they streamline the hiring process and save time and resources for the company.
Taurus Zodiac Sign_ Personality Traits and Sign Dates.pptxmy Pandit
Explore the world of the Taurus zodiac sign. Learn about their stability, determination, and appreciation for beauty. Discover how Taureans' grounded nature and hardworking mindset define their unique personality.
What is the TDS Return Filing Due Date for FY 2024-25.pdfseoforlegalpillers
It is crucial for the taxpayers to understand about the TDS Return Filing Due Date, so that they can fulfill your TDS obligations efficiently. Taxpayers can avoid penalties by sticking to the deadlines and by accurate filing of TDS. Timely filing of TDS will make sure about the availability of tax credits. You can also seek the professional guidance of experts like Legal Pillers for timely filing of the TDS Return.
2. AIM
• Aim of this presentation is to introduce the
topic of Inventory Management to an already
stressed, hard-pressed and unsuspecting class
of students.
(presented by Sneha, Atul & Ajay K Raina)
3. SCOPE
• Part 1 – Basic Concepts.
• Part 2 – Systems and Methods.
• Part 3 – Miscellaneous Aspects.
• Interactive Session and Conclusion.
5. INVENTORY : FIN ACCTG
• The assets that are:– Held for sale in the ordinary course of business; or
– In the process of production for such a sale; or
– In the form of materials or supplies to be
consumed in the production process; or
– In the rendering of services.
• Relevance : Trading concern & Manufacturing
unit.
• Loose tools v/s spares.
6. TYPES OF INVENTORY…
Work in
process
Vendors
Raw
Materials
Work in
process
Work in
process
Finished Customers
goods
7. …….TYPES OF INVENTORY
• Raw Materials – Basic inputs that are converted
into finished product through the manufacturing
process.
• Work-in-progress – Semi-manufactured products
that need some more work before they become
finished goods for sale.
• Finished Goods – Completely manufactured
products ready for sale.
• Supplies – Office and plant cleaning materials that
do not directly enter production but are necessary
for production process and do not involve
significant investments.
9. CURRENT ASSETS
• Realised or consumed in the operating cycle.
• Held primarily for trading.
• Cash or cash-equivalent.
(An asset which is not a current asset is classified as a non current asset)
10. RELEVANCE: INVENTORY
• Constitute significant part of current assets.
• On an average, inventory forms approx 60% of
current assets in Public Limited Companies in India.
• Huge financial implications.
• Effective and efficient management is imperative to
avoid unnecessary investment.
• Improper inventory management affects long term
profitability and may cause failure ultimately.
• 10 to 20% of inventory can be reduced without any
adverse effect on production and sales by using
simple inventory planning and control techniques.
11. INVENTORY MGT
The act or manner of managing, handling, directing or
controlling the flow of inventory.
NEED :• Demand related:-
– Meet unexpected demands.
– Smooth seasonal or cyclical demands.
• Pricing related:– Hedge against price increases.
– Take advantage of quantity discounts.
• Process and supply surprises related:– Internal – upsets in parts of or our own processes.
– External – delays in incoming goods.
12. OBJECTIVES: INVENTORY MGT
• To maintain an optimum size of inventory for
efficient and smooth production and sales
operations.
• To maintain a minimum investment in inventories to
maximize the profitability.
• Effort should be made to place an order at the right
time with right source to acquire the right quantity
at the right price and right quality.
13. SUCCESS MANTRA
• Ensure a continuous supply of raw materials to
facilitate uninterrupted production.
• Maintain sufficient stocks of raw materials in
periods of short supply and anticipate price
changes.
• Maintain sufficient finished goods inventory for
smooth sales operation, and efficient customer
service.
• Minimize the carrying cost and time.
• Control investment in inventories and keep it at an
optimum level.
14. WHAT IF WE OVER REACT?
• Unnecessary tying down of firm’s funds and loss
of profit.
• Excessive carrying costs.
• Risk of liquidity- difficult to convert into cash.
• Physical deterioration of inventories while in
storage due to mishandling and improper
storage facilities.
15. WHAT IF ONE IS TOO COOL!
• Production hold-ups – loss of labour hours.
• Failure to meet delivery commitments.
• Customers may shift to competitors which will
amount to a permanent loss to the firm.
• May affect the goodwill and image of the firm.
16. IN A NUTSHELL
• Track inventory.
• How much to order?
• When to order?
• IF we know the
value, all these
functions will get
addressed!!
BTW,…it is tough to do inventories in Afghanistan because of the tally
ban.
18. INVENTORY SYSTEMS
Factor
Periodic Inventory System
Perpetual Inventory System
Basis of ascertaining inventory By actual physical count
On the basis of records
Calculation of inventory
Directly by applying the
method of valuation of
inventories
Closing Inventory = opening
inventory+ purchases – cost of
goods sold
Calculation of cost of goods
sold
Cost of goods sold = opening
inventory + purchases –
closing inventory
Directly calculated by applying
the method of valuation of
inventories
Lost Goods
Cost of goods sold includes
cost of lost goods (if any)
Cost of closing inventory
includes cost of lost goods (if
any)
19. METHODS OF VALUATION
An inventory valuation allows a company to provide
a monetary value for items that make up its inventory.
Methods:-
• First In First Out (FIFO) Method.
• Last In First Out (LIFO) Method.
• Weighted Average Cost/price Method.
20. FIFO METHOD
• Based on the assumption that the goods that are
received first are issued first.
• For purpose of assigning costs and not exactly for
purpose of physical flow of goods.
• Goods sold, thus, consist of earliest lots and are
valued at the price paid for such lots.
• The ending inventory consists of latest lots and is
valued at the price paid for such lots.
• Balance sheet shows ending inventory costed as per
approx market price.
21. FOR EASE OF ASSIMILATION
(QUESTION) – ABC Ltd. Provides you with the following
information :
- 1.1.20 11 Opening Stock 100 units @ Re 1.
- 2.1.20 1 1 Purchased 400 units @ Rs 1.50.
- 3.1.20 1 1 Issued 450 units.
-4.1.20 11 Purchase 500 units @ Re 2.06.
- 5.1.2011 issued 300 units.
REQUIRED : Compute the value of inventory and cost of
goods sold as on 5.1.2011 assuming:(a) Perpetual system; and
(b) periodic system under FIFO method.
23. 2a… PERPETUAL SYSTEM
Closing inventory calculated as residual figures:- Opening inventory
- Add: Purchases (₹
600+Rs.1,030)
- Less: Cost of good sold
(₹
515+75+525+100)
- Ending inventory (A+B-C)
100
1,630
1,215
₹
515
24. 2b… PERIODIC SYSTEM
Cost of goods sold is calculated as residual
figures:- Opening inventory
100
- Add: Purchase(₹
600+1030)
1,630
- Less: Ending inventory
(250 x ₹
2.06)
515
- Cost of goods sold (A+B-C)
₹
1,215
25. LIFO METHOD
• Based on assumption that goods that are received
last are issued first.
• Assumption made for purposes of assigning costs
and not for actual physical flow of goods.
• Flows of goods and costs may not coincide.
• Goods sold, thus, consist of the latest lots and are
valued at the price paid for such lots.
• The ending inventory consists of the earliest lots
and is valued as such.
• Balance sheet has an inventory costed at old prices.
26. RETRACING OUR STEPS A BIT
(QUESTION) – ABC Ltd. Provides you with the following
information :
- 1.1.20 11 Opening Stock 100 units @ Re 1.
- 2.1.20 1 1 Purchased 400 units @ Rs 1.50.
- 3.1.20 1 1 Issued 450 units.
-4.1.20 11 Purchase 500 units @ Re 2.06.
- 5.1.2011 Issued 300 units.
REQUIRED : Compute the value of inventory and cost of
goods sold as on 5.1.2011 assuming:(a) Perpetual system; and
(b) periodic system under LIFO method.
28. 2a… PERPETUAL SYSTEM
Closing inventory calculated as residual figures:- Opening inventory
- Add: Purchases (₹
600+Rs.1,030)
- Less: Cost of good sold
(₹
600+50+618)
- Ending inventory (A+B-C)
100
1,630
1,215
₹
462
29. 2b… PERIODIC SYSTEM
Cost of goods sold is calculated as residual
figures:- Opening inventory
100
- Add: Purchase(₹600+1030)
1,630
- Less: Ending inventory
(150 x ₹2.06)
462
- Cost of goods sold (A+B-C)
₹ 1,268
30. WEIGHTED AVERAGE PRICE METHOD
• Based on the assumption that each issue of goods
consists of a due proportion of the earlier lots and is
valued at weighted average price.
• Weighted average price is calculated by dividing the
total cost of goods in stock by the total quantity of
goods in stock.
• This weighted price is used for pricing the issues
until a new lot is received when a new weighted
average price would be calculated.
• This method evens out the effect of widely varying
prices of different lots that make up stocks.
31. FOR BETTER UNDERSTANDING
TOTAL
COST in ₹
Units available
Sale
Purchase
Total
1.
2.
3.
--
2.10
210
75
--
--
150
--
2.80
420
100
--
--
50
--
3.00
150
300
Purchase
100
--
Sale
Per unit cost
--
Opening inventory
Units sold
175
The weighted-average cost per unit is ₹
780/300 = ₹
2.60.
Ending inventory is 125 units (300 – 175) at ₹
2.60 = ₹
325;
Cost of goods sold (ie 175 units at ₹
2.60) = ₹
455.
780
33. CLASSIFICATION OF INVENTORY
•
•
•
•
•
•
•
•
ABC Classification(consumption) (25/80+15/15+70/05)
XYZ Classification(value stored) (Hi,Med,Low)
HML Classification(unit-value stored) (Hi,Med,Low)
VED Classification(spare parts mainly) (Vital,Ess,Des)
FSN Classification(consumption) (Fast, Slow, Non)
SOS Classification(agriculture) (Seasonal, Non)
SDF Classification(availability) (Scarce, Difficult, Easy)
GOLF Classification (source of supply) Govt, Ordinarily
available, Local and Foreign)
34. EMERGING TRENDS IN INVENTORY
MANAGEMENT
• Entering into long term contracts at a fixed price
to reduce uncertainties.
• Just-in-time.
• Kanbans – Japanese technique (Only produce
when demand comes).
• Internet based ordering systems.
• Supply chain management.
• Vendor development.
• Investment in plant and machinery.
35. INVENTORY CONTROL RESPONSIBILITY
• Purchasing naturally has vest interest in
inventories, even to the extend that in some
companies the purchasing and stores functions are
combined. the responsibility cannot be kept
In effect,
• Production looks after the workmanagement
on one head since inventory in progress.
• Logistics plays a major role ineffort
is an integrated inventory control
• Inventories are economic importance to finance
department.
• The fact that materials must be moved from one
place to another is of importance to materials
department.
Trading concern – consists of finished goods purchased for resaleMfr unit – raw mtrl, wk in prog, finished goods, stores n spares.Loose tools used in production r part of inventory while spares for machinery and irregularly used are not!