itft-- inventory management
DESCRIPTION
about inventory management, concepts, applications, importance,objectivesTRANSCRIPT
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Inventory Management
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• 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 .
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Types of Inventories
Raw Material Inventories
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Types of Inventories
Work In Process Inventories
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Types of Inventories
Spare Part Inventories
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Types Of Inventories’
Finished Inventories
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Cycle Stock and safety stock
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Classification Of Inventories Cost
Purchase Cost
the cost which the firm pays to its vendor.
Per /unit
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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
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Classification Of Inventories Cost
Holding cost
the cost that accrue due to the actual holding of inventory over a time period.
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Classification Of Inventory Cost
Shortage Cost
This cost occurs when there is no inventory
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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."
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Uses Of Inventory
Uncertainty - Inventories are maintained as buffers to meet uncertainties in demand, supply and movements of goods.
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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.
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Objectives Of Inventory Control
• To ensure smooth flow of stock
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Objectives Of Inventory Control • To provide the required quantity of material
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Objectives Of Inventory Control To control Investment in stock
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Objectives Of Inventory Control Protection against Fluctuating demand
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Objectives Of Inventory Control
Protection against Fluctuation in output
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Objectives Of Inventory Control
Minimization Of Risk and Uncertainty
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Objectives Of Inventory Control
Risk Of Obsolescence
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Objectives Of Inventory Control Minimization Of material Cost