Inventory Management Tips

Inventory Management

Definition of Inventory Management is Inventory or stock, is the stored accumulation of the transformed resources (materials, customers, or information) in an operation.

Benefits of Inventory;

• To cope with random or unexpected interruptions in supply or demand
• To cope with an operation’s inability to make all products simultaneously
• To allow different stages of processing to operate at different speeds with different schedules
• To cope with planned fluctuations in supply or demand
• To cope with the transportation delays in the supply network

Inventories are classified into three categories; Raw materials inventory, Work-in-progress inventory, Finished goods inventory.

In addition, the objectives of Inventory Management are Customer Service, Cost-Efficient Operations, Minimize Inventory Investment. There are also some relevant costs that Inventory Managers should consider which are Item costs, Holding costs, Shortage costs, and Ordering costs.

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