2. INTRODUCTION
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.
3. Items carried in inventory can be
Raw materials
Purchased parts
Components
Subassemblies
Work-in-process
Finished goods
4. Reasons for keeping Inventories
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
5. Objectives and Benefits
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.
14. SELECTIVE CONTROL OF INVENTORY
Selective control refers to the variation in method of
control from item to item on some selective basis.
Many criteria used for this purpose are
Based on the cost of product
Lead time
Usage rate
Procurement difficulties, criticality, frequency of
usage
15. SELECTIVE CONTROL OF INVENTORY
ABC analysis
VED Analysis
Material requirements planning (MRP)
16. CONCLUSIONS
Careful classification of your inventory, and
continuing analysis of those classifications, can play
a vital role in maintaining cost at the efficient levels
you have established as your goals
Inventory control is a constant requirement of doing
business successfully.