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Inventory Management Definition: The Planning & controlling of inventories in order to meet the competitive priorities of the organization.

Effective Inventory management is essential for realizing the full potential of Value chain. Inventories are important to all types of organization & their employees & affect everyday operations because they must be counted, paid for , used in, operations, used to satisfy customers & managed

ABC Analysis: Items held in inventory are not of equal importance in terms of Rupees invested, profit potential, sales or usage volumes or stock out penalties. The ABC approach classifies the inventory items according to the measure of importance, usually annual $/Rs usage (value multiplied by usage rate, & then allocates control efforts accordingly A Very Important B Moderately Important C Least Important A items should receive close attention through frequent reviews of amount `