INVENTRY MANAGEMENT

The dictionary meaning of inventory is ‘stock of

goods’. The word inventory is understood differently
by various authors. In accounting language it may
mean stock of finished goods only. In manufacturing
concern, it may include raw material, work in progress
& stores etc.
Element of Inventory
1) Raw Material- It include direct material used in
the manufacture of products.
2) Work-in-Progress- It includes partly finished
goods & material held held between manufacturing
stages. It can also be stated that those raw material
which used in production process but are not finally
converted into final product are WIP
3) consumable- consumable are product buy
Recurrently , i.e., items which “get used-up” or
Discarded.

4) Finished Goods- The goods ready for sale or

Distribution come under this class .

5) Stores & Spares- This category include those

Product , which are accessories to the main
product Produced for the purpose of sale.
Ex- Bolts , nuts, Clamps etc.
Inventory Management
Inventory Management is to keep the stock in such a
way that neither there is over-stocking nor under-
stocking .
Objective of Inventory Management
1)Availability of material

2) Minimize the wastage

3) Promotion of Manufacturing Efficiency

4) Better service to customer

5) Economy of Purchasing

6) Minimizing Cost

7) Reasonable Cost
Techniques of Inventory Management
1) ABC Analysis (Always, Better, Control)

2) HML Analysis (High, Medium, Low)

3) SDE Analysis (Scare, Difficult Easy to obtain)

4) XYZ Analysis

 YOU
A N K
TH