INVENTORY

MANAGEMENT SYSTEM

Presented By_
Vivek
Yadav
MBA
FINAL YEAR

What is Inventory?
Inventory is stock of items held to meet
future demand.
It is a list for goods and materials, or
those goods and materials themselves,
held available in stock by a business.

It is collection of goods processed to form

desired output to the organization.

Types of Inventories

Types of Inventories
contd.

 Raw Material Goods

Basic inputs that are converted into
finished
product
through
the
manufacturing process.
Work in progress Goods
Semi-manufactured products need some
more works before they become finished
goods for sale.
Finished Goods
Completely manufactured products ready
for sale.

Supplied Goods

 Office and plant cleaning materials not

directly enter production but are
necessary for production process and do
not involve significant investment.

Tasks in Inventory
Management

 Track inventory
To look after the amount of inventory i.e.
stock coming into the business.
How much to order?
To specify units of inventory to be used by
organization.
When to order?
Specify the duration of getting the
inventory.

What is Inventory
Management?

 Inventory management is all about specifying

the size and placement of stocked goods.
It is required at different locations within a
facility or within multiple locations of a
supply network to protect the regular and
planned course of production against the
random disturbance of running out of
materials or good
Inventory management also concerns with
carrying costs of inventory, asset management,
inventory forecasting, inventory valuation,
inventory visibility, future inventory price
forecasting, physical inventory, available physical
space for inventory.

Tasks in Inventory
Management

 Track inventory
To look after the amount of inventory i.e.
stock coming into the business.
How much to order?
To specify units of inventory to be used by
organization.
When to order?
Specify the duration of getting the
inventory.

Inventory
Management flow
cycle

Raw Material InspectionMoving

Processing Setup Final Product

Advantages of
Inventory
Management

 To decouple or separate various parts of the

production process.
To split up the firm from fluctuations in
demand and provide a stock of goods that will
provide a selection i.e. variety for customers.

To take advantage of quantity discounts.

To survive against inflation

Replenishment System

Replenishment refers to the movement of

inventory from upstream -- or reserve -product storage locations to downstream -- or
primary storage, picking and shipment
locations.


It refers to an inventory control system
that depends on accurate estimates of usage
rates and delivery lead times to allow orders
to be completed and to ensure stock does not
run out. It is stated that the timing of a
replenishment order is crucial, as buffer stock
should not be allowed to run out during the
time it takes for a delivery to arrive.