Inventory Control

In: Business and Management

Submitted By aksardsouza
Words 3252
Pages 14
TOPICS COVERED IN THIS CHAPTER :
13.1.0 Definition Of Inventory :
13.2.0 Various Costs Related To Inventory Management :
13.3.0 Inventory Management - Constrains & Problems :
13.4.0 Economic Order Quantity :
13.5.0 Measuring Efficiency Of Inventory Management :
13.6.0 Inventory Control :

DETAILS OF TOPICS COVERED IN THIS CHAPTER ARE AS FOLLOWS :
13.1.0 Definition Of Inventory :
The Dictionary meaning of Inventory is 'a list of goods'. In a wider sense, inventory can be defined as an idle resource which has an economic value. It is however, commonly used to indicate various items of stores kept in stock in order to meet future demands. * In any organization, there may be following four types of inventory:
(a) Raw materials & parts-- These may include all raw materials, components and assemblies used in the manufacture of a product;
(b) Consumables & Spares -- These may include materials required for maintenance and day-to-day operation;
(c) Work in progress -- These are items under various stages of production not yet converted as finished goods;
(d) Finished Products -- Finished goods not yet sold or put into use.
13.1.1 Need For Inventory : Many of the items we need for our day-to-day maintenance and operation are required to be specially manufactured for the Railways. The time to procure these materials, therefore, is longer due to various reasons and it is not possible to procure these materials when instantaneously required. It is, therefore, necessary to keep stocks of such items. * Even for those items which are readily available in the market, it may not be economical to buy these items every time as buying in piecemeal involves additional costs to the administration. Therefore, we may find it cheaper to buy in bulk and to stock some of these items and supply our indentors through such stocks. * There are…...

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