Although integrated logistics managers prefer no inventory in the pipeline, some inventory is necessary. The integrated logistics manager should be able to identify and effectively manage the functional inventories.
Cycle stock is the product consumed through sales or use and replenished...
Normal inventory:
Normal inventory is required to support the replenishment process under conditions of certainty. In other words, if demand and order cycle time never change, normal stock are all the organization would require to meet its customer’s needs.
Safety stock:
Safety stock is...
Inventories allow firms with subsidiaries to specialize. Instead of producing a variety of products, each plant can manufacture a product and then ship the finished products directly to customers or to a warehouse for storage. By specializing, each plant can gain economies of scale through long...
A firm’s functional areas may disagree over inventory. Marketing wants high inventories over a broad range of products to allow quick response to customer demand.
Manufacturing wants high inventories to support long production runs and to realize economies of scale through the reduction of...
One of the most misunderstood integrated logistics activities is inventory planning and inventory management.
In an ideal world, no inventory would be required because manufacturers could exactly forecast demand and produce only that much.
Unfortunately the world is not perfect and...
"Inventory" too many small business owners is one of the more visible and tangible aspects of doing business.
Raw materials, goods in process and finished goods all represent various forms of inventory.
Each type represents money tied up until the inventory leaves the company as purchased...
It indicates the frequency of sales or inventory replacement.
If COGS is not known, use the net sales. If average inventory cannot be calculated, use only closing inventory. If the break up of inventory is given (ie Raw materials, WIP, finished goods) use only the finished goods in the...
TOOLS OF INVENTORY CONTROL
PHILOSOPHY
Neither can one control everything nor should one try to do so.
Uniform control is rarely effective. Effectiveness results when important aspects of a problem are pursued more rigorously than others.
A major portion of managerial time should be spent...
WHAT ARE INVENTORIES?
Inventory refers to stock of raw materials , work in progress and finished goods
Can be stored for future use.
Inventory possess value.
Objective of inventory is to ensure continuous supply of goods at reasonable cost.
NEEDS OF INVENTORY
To maintain continuous flow...
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