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Home - inventory management
This web site is designed to help navigate
you through the mountain loads of information about the many aspects of
business inventory management.
 The task of inventory planning can be highly complex in manufacturing
environments. At the same time, it rests on fundamental principles. The
system used for inventory must tie into the operations of the firm.
Inventory planning and management must be responsive to the needs of the
firm. The firm should design systems, including reports that allow it to
make proper business decisions.
Role of inventory management in working capital
Inventories are a component of the
firm's working capital and, as such, represent a current asset. Some
characteristics are important in the broad context of working
capital management
Purpose
of holding inventory
The Four
Types of Inventory
Costs Associated
with Inventories
The effective management of inventory
involves a trade off between having too little and too much
inventory. In achieving this trade off, the Finance Manager should
realize that costs may be closely related.
about
ordering costs
about
carrying inventory costs
Cost of
running out of inventory
Inventory
management techniques
The total ordering costs can be
decreased by increasing the size of order
economic order quantity
Inflation
point information
reorder point
Learn about
safety stock
The
Reorder Point Formula
The total system for
inventory management
The three subsystems are tied together in
a single inventory-management system. The inventory management system
can also be illustrated in terms of the three subsystems that comprise
it. The figure below ties each subsystem together and shows the three
items of information needed for the decision to order additional
inventory.
Inventory planning
The production
side
The marketing
side
Inventory data
base
The ABC System of Inventory
Management
In the case of a manufacturing company of
reasonable size the number of items of inventory runs into hundreds, if
not more. From the point of view of monitoring information for control
it becomes extremely difficult to consider each one of these items.
The general procedure for categorization
of items into `A', `B' and `C'
The advantages of this system
The required plan of ABC selective
control
Methods that can be adopted to
value the raw material
The valuation of work-in-process and
finished goods inventory
Other pages
Inventory
management liquor industry
Salon inventory
management system
Tire inventory
management
Equipment inventory management system
Hardware
inventory management software
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