Please enable JavaScript.
Coggle requires JavaScript to display documents.
INVENTORY CONCEPT AND MANAGEMENT (Need for inventory management (Economies…
INVENTORY CONCEPT AND MANAGEMENT
Definition Inventory
An idle stock of physical goods that contain economic value, and are held in various forms by an organization in its custody awaiting packing, processing, transformation, use or sale in a future point of time.
Types of inventory
Finished goods inventory
Maintenance, repair and operating supplies inventory
Work-in-process inventory
Pipeline/In-transit Inventory
Raw materials and semifinished item inventory
Inventory Management Concepts
Definition
Manufactures agreeing to manage and hold inventories at their end customers and thereby effect Just In Time deliveries.
Supplier benefit
In a better position to bargain and get more business
Gets an opportunity to engage in better value proposition with customer
Better relationship and collaboration with long term prospect
Supplier don't have to marry fixed cost of invetory operations
Need for inventory management
Economies of scale in procurement
Take advantage of price increase and quantity discounts
Cater to cyclical and seasonal demand
Reduce transit cost and transmit times
Meet variation in production demand
Long lead and high demand items need to be held in inventory