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Does your business need inventory management ideas, techniques or even software? We have put together information for you about inventory management systems. Take a look around our site for the latest information about inventory management techniques and programs. An important component of inventory planning involves access to an inventory database. A database is a collection of data items arranged in files, fields and records. Essentially, we are working with a structured framework that contains the information needed to effectively manage all items of inventory, from raw materials to finished goods. This information includes the classification and amount of inventories, demand for the items, cost to the firm for each item, ordering costs, carrying costs, and other data. The first component of an inventory
database deals with the movement of individual items and the second
component of inventory management data involves information needed to
make decisions on rendering or replenishing the items.
A store using the ABC system segregates its inventory into three groups - A, B and C. The items are those in which it has the largest dollar investment. The A group consists of the 10 percent of the inventory items that account for 70 percent of the liquor store's dollar investment. These are the most costly or the slowest turning items of inventory. The B group consists of the items accounting for the next largest investment. The B group consists of the 20 percent of the items accounting for about 20 percent of the liquor store's dollar investment. The C group typically consists of a large number of items accounting for a small rupee investment. C group consists of approximately 70 percent of all the items of inventory but accounts for only about 10 percent of the liquor store's dollar investment. Such items as screws, nails, and washers would be in this group. Classifying the inventory into A, B, and C items allows the liquor store to determine the level and types of inventory control procedures needed. Control of the A items should be most intensive due to the high rupee investments involved, while the B and C items would be subject to correspondingly less sophisticated control procedures. The general procedure for categorization of items into `A', `B' and `C'
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