Вы находитесь на странице: 1из 3

Activities: Inventory control means How important to the business

3 Goals - Objectives of Inventory Management : The primary objectives of inventory management are: (i) To minimize the possibility of disruption in the production schedule of a firm for want of raw material, stock and spares. (ii)To keep down capital investment in inventories. So it is essential to have necessary inventories. Excessive inventory is an idle resource of a concern. The concern should always avoid this situation. The investment in inventories should be just sufficient in the optimum level. => The major dangers of excessive inventories are: (i) the unnecessary tie up of the firms funds and loss of profit. (ii) excessive carrying cost, and (iii) the risk of liquidity. The excessive level of inventories consumes the funds of business, which cannot be used for any other purpose and thus involves an opportunity cost. The carrying cost, such as the cost of shortage, handling insurance, recording and inspection, 191are also increased in proportion to the volume of inventories. This cost will impair the concern profitability further. On the other hand, a low level of inventories may result in frequent interruptions in the production schedule resulting in under-utilization of capacity and lower sales. The aim of inventory management thus should be to avoid excessive inventory and inadequate inventory and to maintain adequate inventory for smooth running of the business operations. Efforts should be made to place orders at the right time with the right source to purchase the right quantity at the right price and quality. The effective inventory management should (i) maintain sufficient stock of raw material in the period of short supply and anticipate price changes. (ii) ensure a continuous supply of material to production department facilitating uninterrupted production. (iii) minimize the carrying cost and time.

(iv) maintain sufficient stock of finished goods for smooth sales operations. (v) ensure that materials are available for use in production and production services as and when required. (vi) ensure that finished goods are available for delivery to customers to fulfil orders, smooth sales operation and efficient customer service. (vii) minimize investment in inventories and minimize the carrying cost and time. 192(viii) protect the inventory against deterioration, obsolescence and unauthorized use. (ix) maintain sufficient stock of raw material in period of short supply and anticipate price changes. (x) control investment in inventories and keep it at an optimum level.

4.Record all material leaving your warehouse - There should be appropriate paperwork for every type of stock withdrawal. Under no circumstances should material leave the warehouse without being entered in the computer. Eliminate "no charge/no paperwork" material swaps. Product samples should be charged to a salesperson's account until they are either returned to stock or charged to the customer. 5.Process paperwork in a timely manner - All printed picking documents should be filled by the end of the day. Stock receipts should be put away and entered in the computer system within 24 hours of arrival. 6.Set appropriate objectives for your buyers - Buyers should be judged and rewarded based on the customer service level, inventory turns, and return on investment for the product lines for which they are responsible. 7.Ensure that stock balances are accurate and will remain accurate - Implement a comprehensive cycle counting program. A good cycle counting program can replace your traditional year-end physical inventory.

REF: http://books.google.com.au/books?hl=en&lr=&id=6Y6FFgOUPkC&oi=fnd&pg=PT6&dq=time+relate+to+logistic+actitivities&ots=kMgXhM1_I_&sig=F21P_ _N97e38CQIRBEvqJQEm1ls#v=onepage&q=time%20relate%20to%20logistic%20actitivities&f=false

http://www.emeraldinsight.com.ezproxy.lib.rmit.edu.au/journals.htm?articleid=1527525&show=ab stract