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INVENTORY

INVENTORY<br>The raw materials, work-in-process goods and completely finished goods that are considered to be the portion of a business's assets that are ready or will be ready for sale.<br>

SHYAMRAJ
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INVENTORY

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  1. PREPARED BY SHYAM RAJ P 1ST YEAR MBA CMS NILESHWAR Inventory

  2. Meaning and Definition of Inventory In dictionary meaning: inventory is a “detailed list of goods, furniture etc.” In a manufacturing organization, however, in addition to the stock of finished goods, there will be stock of partly finished goods and raw materials. The collective name of these entire items is ‘inventory’.

  3. The raw materials, work-in-process goods and completely finished goods that are considered to be the portion of a business's assets that are ready or will be ready for sale. In Short…

  4. Reasons why organizations maintain Inventory/ Needs to held inventory • 1 . Meet variation in Production Demand Production plan changes in response to the sales, estimates, orders and stocking patterns. Accordingly the demand for raw material supply for production varies with the product plan. Holding inventories at a nearby warehouse helps issue the required quantity and item to production just in time.

  5. Reasons why organizations maintain Inventory • 2 . Cater to Cyclical and Seasonal Demand Market demand and supplies are seasonal depending upon various factors like seasons; festivals etc. Accordingly they stock up raw materials and hold inventories to be able to increase production and rush supplies to the market to meet the increased demand.

  6. Reasons why organizations maintain Inventory • 3 . Economies of Scale in Procurement Buying raw materials in larger lot and holding inventory is found to be cheaper for the company than buying frequent small lots. In such cases one buys in bulk and holds inventories at the plant warehouse.

  7. 4 . Take advantage of Price Increase If there is a price increase expected few months down the line due to changes in demand and supply in the national or international market, impact of taxes and budgets etc, the company’s tend to buy raw materials in advance and hold stocks as a hedge against increased costs. Reasons why organizations maintain Inventory

  8. 5. Reduce Transit Cost and Transit Times In case of raw materials being imported from a foreign country or from a far away vendor within the country, one can save a lot in terms of transportation cost buy buying in bulk and transporting as a container load or a full truck load. Part shipments can be costlier. Reasons why organizations maintain Inventory

  9. The overseeing and controlling of the ordering, storage and use of components that a company will use in the production of the items it will sell as well as the overseeing and controlling of quantities of finished products for sale. Inventory Management

  10. 1. To keep inventory at sufficiently high level to perform production and sales activities smoothly. 2. To ensure that the supply of raw material & finished goods will remain continuous so that production process is not halted and demands of customers are duly met. objectives of inventory management

  11. 3. To minimize carrying cost of inventory.4. To keep investment in inventory at optimum level.5. To reduce the losses of theft, obsolescence & wastage etc.6. To control inventory maintaining costs.

  12. THANKYOU…

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