INVENTORY MANAGEMENT (2) What are the basis in inventory management?…
1) Define inventory management.
is the practice overseeing and controlling of the ordering, storage and use of components that a company uses in the production of the items it sells. Inventory management is also the practice of overseeing and controlling of quantities of finished products for sale. A business's inventory is one of its major assets and represents an investment that is tied up until the item sells.
2) What are the basis in inventory management? Briefly explain.
Unit of measure
Stock keeping unit
4) Briefly explain three service classes in inventory management.
-it is not necessary urgent but give the benefit.
For example, computer.
-where the services or good are quickly
needed. For example, medical emergency
each worker and manager should know what time should deliver the goods beside should know how many truck should be operation, it it to make sure to know how the production line.
3) Explain five costs that involved in inventory management.
The systematic coordination of all aspects of the procurement process including bids, price negotiations, assuring proper quantities and specifications, shipping and delivery. The goal is to obtain materials, services or products at the best possible cost which meet the needs and time constraints of the organization.
a ratio showing how many times a company's inventory is sold and replaced over a period of time. The days in the period can then be divided by the inventory turnover formula to calculate the days it takes to sell the inventory on hand. It is calculated as sales divided by average inventory.
The total expenses associated with securing finance for a project or business arrangement. i.e. Interest payments, financing fee charged by intermediary financial institution, fees or salaries of any personnel required to complete the financing process.This cost includes interest on loans, overdraft charges etc
Human Capital Cost
Human capital is a measure of the economic value of an employee's skill set. This measure builds on the basic production input of labor measure where all labor is thought to be equal. The concept of human capital recognizes that not all labor is equal and that the quality of employees can be improved by investing in them; the education, experience
refers to all the discrepancies that exist between electronic records that represent the inventory and the physical state of the inventory. On of the most common form of inventory inaccuracy is phantom inventory. Such discrepancies can result in lower service levels, along with broader accounting issues and financial losses.
5) What are the strategies to better manage inventory? Briefly explain.
is delaying final product configuration until the very last moment. This allows
them to reduce inventory and provide a more agile response to unpredictable product demand.
Vendor Management Inventory (VMI)
is a family
of business models in which the buyer of a product and the supplier takes full responsibility for maintaining an agreed inventory of the material, usually at the buyer's consumption location (usually a store).