Tutorial 4 INVENTORY MANAGEMENT (3) Five costs (Procurement cost ( This…
Tutorial 4 INVENTORY MANAGEMENT
It is the supervision of non-capitalized assets and stock items.
A component of supply chain management, inventory management supervises the flow of goods from manufacturers to warehouses and from these facilities to point of sale.
2) Basics in inventory management
Stock keeping unit
Units of measure
3) Five costs
This related with cost of purchasing including inbound transport, which the cost involved with the purchasing land, buildings, equipment, raw materials and a variety of other business needs.
Management of cost related to activities that achieved by collecting, analyzing, evaluating, and reporting cost information used for budgeting, forecasting, and monitoring costs to predict impending expenditures to help reduce the chance of going over budget.
When capital investment in inventory, it is the cost and interest and other charges involved in the borrowing of money to build or purchase assets.
It is the cost of label to manage stock which the cost that related to collective skills, knowledge, or other intangible assets of individuals that can be used to create economic value for the individuals, their employers, or their community. For example: moving it, handling it and counting it.
Incurred for common or joint objectives and therefore cannot be identified readily and specifically with a particular sponsored project, an instructional activity, or any other institutional activity.
Is the holding cost which is included rental, equipment, capital improvement, operation and maintenance expenses.
4) 3 service classes
This goods can be built or customised for particular customers
and delivery according to a greater delivery time.
For example, furniture and some technological products.
Is the product needed quickly such as medicine or emergency.
The products are needed within a reasonable time, which is not necessarily urgent such as computer and building material.
5) Strategies to better manage inventories
Manage their own stock until the good use on the production line. It does not have to carry any stock and only pay for the stock when use.
These strategies can save the manufacture money.
This is common to many international manufacturers and is the process to postpone the final assembling of goods until it is made to the market and sold.