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CHAPTER 4 INVENTORY MANAGEMENT (Inventory Management Practices (iii.…
CHAPTER 4
INVENTORY MANAGEMENT
1) Inventory Management ??
i.
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.
ii.
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 investments that is tied up until the items sells.
Definition:
2) Basic Inventory Management ??
iv. Record
paper
PC
ii. Identity
I.D tabels
Unit of measures
Stock keeping unit
i. Location
On-side
Off-side
Dropship
i. Plan
Pull
Push
3) Cost involved in inventory management
Procurement cost
Cost that related to the purchasing cost which is included bids,price negotiations and others
Human capital
Human capitals is a measure of the economic value of an employee's skill set
Facilities Cost
The cost is included rental, office equipment, utilities and others
Management Cost
A ratio that show how many times a company inventory is sold and replaced over a period time
Financial Cost
The costed to finance is interest or lot of opportunities invested capital when the capital was invented in inventory
Inventory Management Practices
iii. Manage your inventory
iv. Implement quality control
ii. Make your cycles account
v. Optimize
i. Know what type of inventory management fits your problem
vi. Prepare
4) Three service classes in inventory management
Scheduled Inventory
Each work and manager should know what time should deliver the goods besides should know how many truck should be operation, it is to make sure to knpw how the production line
Critical
where the services or good are quickly needed. For example: medical emergency
Non-Critical
It is not necessary urgent but give the benefit
5) Strategy to better manage inventory
iii. Predict sales
Can predicts sales by using past sales figures to predict future demand, Bench marking your company against other firms in the industry and analyzing the potential market
iv. Inventory turnover calculator
The tool can help to calculate the number of times inventory has been sold and replaced during the year
ii. Set service-level target
Measure performance on a regular basis so can adjust the targets or process t meet the goals
i. Best practice
4) Plan for the unexpected: make sure have a good relationship with backup suppiers
3) Pay attention to consumer and industry trends
2) Put JIT inventory management into practice
1) Keep accurate inventory records