Last Updated 11 May 2020

The Scope Of Inventory Management

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The scope of inventory management also concerns the fine lines between replenishment lead time, carrying costs of Inventory, asset management, Inventory recasting, inventory valuation, inventory visibility, future inventory price forecasting, physical inventory, available physical space for inventory, quality management, replenishment, returns and defective goods and demand forecasting. Balancing these competing requirements leads to optimal inventory levels, which is an on-going process as the business needs shift and react to the wider environment.

It Involves a retailer seeking to acquire and maintain a proper merchandise assortment while ordering, shipping, handling, and related costs are kept in check. Systems and processes that identify Inventory requirements, set targets, provide blandishment techniques and report actual and projected inventory status. It handles all functions related to the tracking and management of material. This would Include the monitoring of material moved Into and out of stockroom locations and the reconciling of the inventory balances.

It may also include BBC analysis, lot tracking, cycle counting support etc. Management of the inventories, with the primary objective of determining/controlling stock levels within the physical distribution function to balance the need for product availability against the need for minimizing stock holding and handling costs. Http://www. Essays. Com/essays/business/the-changing-dynamics-of-supply-chain- Inventory-management-business-essay. PH The Importance of Inventory Management There are many different reasons why Inventory management Is so Important in today's world.

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One of them is being able to know exactly how many of each product you have in stock, so you know exactly how much needs to be ordered. Without proper Inventory management, you may order too many of one thing, and not enough of something else. What does this translate too? Running out and having to order available storage space. Proper inventory management also allows you to track the reduces you sell. You can see at a glance what items sell the most, what time of the year that more are sold, and have a chance to see what patterns develop so you can plan your buying accordingly.

For an example, if you are a clothing merchandise store, and you find that you sell more coats and hats during the fall, Just before Winter, or during the Spring, then you can order more of these items before then, so there is enough merchandise before hand. It also helps you track products that don't sell as often, or at all, so you can either not order as much as your would routinely do, r maybe even decide to discontinue this product line altogether. Having the right inventory management software is Just as important.

Today, inventory has become streamlined, with bar codes, scanning devices, and computers, so you need software that keeps up with the latest technology. You need to be able to find out at a glance if you are running out of something, rather than going in the back or having to call the warehouse to find out. Your inventory managers need to be able to quickly and easily count how many items there are, and be able to scan the bar code and have it unloaded into the computer automatically, without having to physically write down the information and then input it into their inventory computer.

Inventory management is vital to today's businesses, especially in the retail market. In order to keep up with sales, trends, and popularity of a certain product, or line of products, the only way to do this is if you can track what sells, how much does at certain times of the year, and what products are losing ground. This really is the only way to keep up with your competition, order the right amount at the right time, and know whether o eliminate products that Just aren't selling, saving you space, time, and money. Http://Centralizes. Com/4499595 Past Advancements Models: Lee & Billionth (1993) developed a model for inventory management considering decentralized supply chains. A heuristic stochastic model for managing material flows on a site-by-site basis. Specifically, the authors model a pull-type, periodic, order up-to inventory system, and determine the review period (by product type) and the order up-to quantity (by product type) as model outputs.

The authors develop a model which will either: (1) determine the material ordering policy by calculating the squired stock levels to achieve a given target service level for each product at each facility or (2) determine the service level for each product at each facility, given a material ordering policy. Began & Cohen (1996) developed a stabilizing model for effective inventory be made complex considering a multi product scenario and discontinuous supply chains. So the models developed should have room for all kinds of supply chain variability.

Canon & Fisher (2000) developed a value shared information model and performed a comparative study with the conventional data sharing strategies and ended up with he proposed model performing better, reducing inventory holding expenses. In Practice: Multi-Echelon Inventory System: pertaining to inventory located at one particular place only, whereas in practice it is distributed at several places. In an organization with many projects, there is the central store and a number of Multi-Echelon Inventory Systems.

We have to take a holistic look at the inventory rather than an isolated look. The decisions to be taken are regarding the number of echelons, the number of storage points of each echelon, the location of central stores. Each storage location has to optimize the inventory and TTS redistribution. Slow moving but capital intensive items are located at central stores, rather than at projects. Materials Requirements Planning (MR.): MR. is extensively being used since it lends itself to computerizing.

It is applicable in production situation having products with inverted tree like structure. The master production schedule of end product dictates the demands for parts and sub- assemblies. It is a system of order scheduling for dependent demand situation. This system anticipates the requirements of finished products, and based on this information and other inputs, generates statements. ) Sub-assemblies and components 2) Raw materials necessary to make the finished products.

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