Term Paper About Inventory

INDRODUCTION

An inventory is any stock of economics resources that is stored for future use.it is commonly used to indicate materials, raw materials progress, finished goods, packing materials, spares, etc. Stocked in order to meet an excepted demand or distribution in future. Even though inventory of materials is an ideal resource, in the sense it is not meant for immediate use, it is almost a necessity to maintain some inventories for the smooth functioning of an organization.

Inventory means physical stock of goods, which is kept in hands for smooth and efficient running of future affairs of an organization at the minimum cost of funds blocked in Inventories. The fundamental reasons for carrying Inventory is it is physically impossible

Rosenblatt (1997) says: “The cost of maintaining inventory is included in the final price paid by the consumer. Good in inventory represents a cost to their owner. The manufacturer has the expense of materials and labor. The wholesaler also has funds tied up”

Therefore, the basic goal of the researchers is to maintain a level of inventory that will provide Optimum stock at lowest cost Flow of inventory cost

The flow of inventory costs for merchandisers (wholesaler and retailers) is relatively simple. When merchandise is purchased, the merchandise inventory account is increased. When the goods are sold, cost of goods sold is increased and merchandise inventory is increased.

SOME DEFINITIONS OF INVENTORY MANAGEMENT

Inventory Management is an important area of production management and also plays a vital role in the financial management as it affects the economic operations of a business firm. Some definitions to understand the concept of inventory management are as

Eliminates duplication in ordering or replenishing the stocks.

Reduced lead time and transportation costs.

Increases the competitiveness of end products by ensuring right quality and right quantity at right time for right price.

Faster inventory turnover.

Establishes high ethical standards as well as establishes good buyer-seller relations.

TOOLS & TECHNIQUES OF INVENTORY MANAGEMENT

Inventory management requires an efficient control system for inventories. Proper inventory controls not only helps in solving the acute problems of liquidity but also increases profits and cause substantial reduction in the working capital of the concern. Proper inventory control system leads to an optimum utilization of resources, increasing the productivity and maximizing the margin of profits.

At GINGER Pvt. Ltd. Plant-1, the following are important tools and techniques of Inventory Management and Control:

Proper Production Planning and Control.

Proper Purchase Procedure.

Proper Storage Procedure.

Fixation of Stock Levels and Economic Ordering Quantity.

Methods of Pricing of Material