purpose of inventory
The bond of all the functions above will lead towards the inventory management. As the inventory management is considered as one of the most valuable assets of an organization, an efficient inventory management systems are needed to manage it. Below are the purpose of inventory management:
The many changes in the market demand , new opportunities due to worldwide marketing , global sourcing of materials and new manufacturing technology means many companies need to change their Inventory Management approach and change the process for Inventory Control .
Inventory Management system provides information to efficiently manage the flow of materials , effectively utilize people and equipment , coordinate internal activities and communicate with customers . Inventory Management does not make decisions or manage operations, they provide the information to managers who make more accurate and timely decisions to manage their operations
Inventory is defined as the blocked Working Capital of an organization in the form of materials . As this is the blocked Working Capital of organization, ideally it should be zero. But we are maintaining Inventory . This Inventory is maintained to take care of fluctuations in demand and lead time. In some cases it is maintained to take care of increasing price tendency of commodities or rebate in bulk buying.
An efficient inventory control can lead to a flexibility in production scheduling. This is because when a firms stores an extra stock, the production scheduling can be modified or operated at extra time in order to meet the customer’s demand.
The inventory management will able the firms to ensure the availability of product. Hence, the firms can improve their customer service by meeting their customer’s requirements of the product thus, decreasing the lead time and preventing against stock-outs.
When a firms deal a large order with their supplier, they will be tent to have a discount and thus, it
The many changes in the market demand , new opportunities due to worldwide marketing , global sourcing of materials and new manufacturing technology means many companies need to change their Inventory Management approach and change the process for Inventory Control .
Inventory Management system provides information to efficiently manage the flow of materials , effectively utilize people and equipment , coordinate internal activities and communicate with customers . Inventory Management does not make decisions or manage operations, they provide the information to managers who make more accurate and timely decisions to manage their operations
Inventory is defined as the blocked Working Capital of an organization in the form of materials . As this is the blocked Working Capital of organization, ideally it should be zero. But we are maintaining Inventory . This Inventory is maintained to take care of fluctuations in demand and lead time. In some cases it is maintained to take care of increasing price tendency of commodities or rebate in bulk buying.
An efficient inventory control can lead to a flexibility in production scheduling. This is because when a firms stores an extra stock, the production scheduling can be modified or operated at extra time in order to meet the customer’s demand.
The inventory management will able the firms to ensure the availability of product. Hence, the firms can improve their customer service by meeting their customer’s requirements of the product thus, decreasing the lead time and preventing against stock-outs.
When a firms deal a large order with their supplier, they will be tent to have a discount and thus, it