This chapter answers the basic questions in the inventory management such as how and how much inventory to be kept, and when procurement has to be done. The various inventory control techniques are discussed in detail. 4.2.1 Inventory Classification Techniques There are thousands of items stored in inventories. The items may range from spare parts for producing a product to a set of finished products kept for distribution. It is extremely difficult to exercise control over different items of inventory that vary in their value, complexity, size and purpose.
Their prudent service may advance manufacturers business as a whole or department level. If any organization do not execute inventory properly then their stock of raw material may increased oddly what will make deficit on their current capital or that companies production may hamper lack of necessary raw materials what will make bad affiliation with their business partners. By above statement we can realize that the importance and necessity of inventory control in any organization is
Inventory Management--Using Discrete Event Simulation Submitted by: Kimsy Gulhane B.Tech (IT), MBA Assistant professor, DMT, RCOEM, Nagpur. E-mail:email@example.com Phone no. :9823507703 I. ABSTRACT Inventory management deals with maintaining the stock such that there are not shortages, that is, demand is fulfilled. This means that there should be enough stock and this requires more inventory cost. So there has to be a balance between fulfilling demand and inventory cost.
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CHAPTER I ABOUT THE STUDY INTRODUCTION Effective inventory management is all about knowing what is on hand, where it is in use, and how much finished product results. Stock administration is the procedure of productively taking care of the consistent stream of units into and out of a current store. This procedure as a rule includes controlling the move in of units, keeping in mind the end goal to keep the stock from turning out to be too high, or diminishing to levels that could put the intellectual procedure of the organization into peril. Equipped stock administration likewise looks to control the money related qualities connected with the stock, both from the complete's perspective estimation of the products included and the taxation rate
Throughout the years, several different methods have been developed, which are dependent on the respective regulations of countries and institutions, such as the Internal Revenue Service (IRS). The most common inventory methods include FIFO (first-in, last-out), LIFO (last- in, first-out), HIFO (highest-in, first-out), FEFO (first-expired, first-out), as well as the average costing method (AVCO). Each of them has their specific advantages and disadvantages, and comes with certain restrictions and regulations (Lee and Hsieh, 1983, p.7). This paper is going to take a look at the choice of inventory accounting methods of FIFO and LIFO, and is therefore not going to consider the other inventory accounting methods, as that goes beyond the topic of this
On the other hand, too much inventory ties up capital that can be used elsewhere more effectively. The trend has been to lower inventory levels over the past decades (Brealey;Myers;& Allen, 2006 pp 821). For example, 30 years ago U.S companies had approximately 12% of total assets tied up in inventory, whereas today the percentage is around six (Brealey;Myers;& Allen, 2006 pp 821). A concept that is often used for inventory management is just-in-time approach. The just-in-time means that inventories are kept to a bare minimum and optimizing the supply chain processes to serve so that the inventories never