Inventory Management and Control

Through these tutorials we shall brush upon the very basic of inventory management and understand various terms associated with it. The training has been taken with the help of practical illustrations and examples to understand the topics better. The training would include the following:

• Inventory Control – Meaning & Objective
• Fixation of Inventory Level
• Economic Order Quantity
• ABC Analysis
• Procurement Process
• Pricing of material issued and inventory
• Just In Time Inventory

Inventory can be defined as any asset i.e. resources capable of generating future economic benefits held by any manufacturing/ service organization which are either: –

1. Held for sale in the ordinary course of business; or
2. Used in the production of goods organization produces and sell; or
3. Or used as a raw material or any other supplies which will be consumed in the process of production or service supply.

Inventories can be defined as any asset or resource owned by an organization which is either purchased and hold for the purpose of selling or will be used in the production of finished goods which will be sold further or any raw material or consumable supplies which are used in manufacturing or providing services. Not only goods which are directly sold are considered as inventory but also all other materials/ supplies which are consumed or gets converted into finished goods are also considered as inventory. Not only a manufacturing industry but also a service provider can have inventories. Three basic classifications of inventories are as follows:

Raw Material: This is basic goods procured which will be converted into finished goods;

Work-In-Progress: Type of inventory on which the production process is applied partially but is not wholly converted into finished goods at any particular point of time.

Finished Goods: Finished goods are form of inventories on which the entire production process is applied and the product is in sellable condition.