inventory

Examples of inventory in the following topics:

• Inventory Management

  • In the context of accounting, inventory or stock is considered an asset.
  • Inventory management tracks the shape and percentage of stocked goods.
  • Inventory management addresses a number of concerns, including: replenishment lead time; carrying costs of inventory; asset management; inventory forecasting; inventory valuation; inventory visibility; future inventory price forecasting; physical inventory; available physical space for inventory; quality management; replenishment; returns and defective goods; and demand forecasting.
  • Reasons for keeping an inventory include:
  • Inventory considerations present at each level include:

• Inventory decisions

  • The key question that must be answered for inventory is "How much?
  • " Understanding the best inventory levels to carry is critical to the organization because too much inventory and too little inventory are both costly to the organization.
  • Inventory that exceeds what is needed to satisfy customer demand imposes unnecessary costs such as storage, deterioration, obsolescence, theft, and money tied up in inventory that cannot be used for other purposes.
  • Too little inventory means the organization cannot meet 100 per cent of its customer demand and sales revenues are delayed or lost.
  • Computer companies such as Dell must carefully manage its computer chip inventory so it can meet current customer orders, but not be stuck with too much inventory if a new computer chip comes out or if vendors reduce prices.

• Inventory Management

  • Inventory represents finished and unfinished goods that have not yet been sold by a company.
  • So bulk buying, movement and storing brings in economies of scale, thus inventory.
  • Inventory management is primarily about specifying the location and amount of stocked goods.
  • Optimizing inventory management requires balancing many factors, including:
  • Manufacturers', distributors', and wholesalers' inventory tends to cluster in warehouses.

• Purchasing Inventory

  • Inventory management is primarily about specifying the quantity and placement of stocked goods.
  • Inventory management is primarily about specifying the quantity and placement of stocked goods.
  • The scope of inventory management also involves stock replenishment lead time, carrying costs of inventory, asset management, inventory forecasting, inventory valuation, inventory visibility, future inventory price forecasting, physical inventory, available physical space for inventory, quality management, returns and defective goods, and demand forecasting .
  • Consumption: Inventory is to be maintained for consumption during variations in lead time.
  • Inventory purchases should be carefully managed to prevent overstocking merchandise or having inventory shortages.

• Special topic: just-in-time and lean systems

  • In a manufacturing setting, there are six major ways to pursue JIT goals: inventory reduction to expose waste, use of a "demand-pull" production system, quick setups to reduce lot sizes, uniform plant loading, flexible resources, and cellular flow layouts.
  • Inventory covers up a lot of wasteful practices (poor equipment, weak vendors, bad quality, long setup times, etc.).
  • By gradually lowering inventory, the weaknesses of the production system can be revealed and addressed one by one.
  • These improvements permit the organization to operate with less inventory, less costs, and faster response times in meeting customer needs.

• Activity Ratios

  • Cash Conversion Cycle - Inventory Conversion Period + Receivable Conversion Period - Payable Conversion Period
  • For some business, inventory turnover is an incredibly important metric.
  • Inventory turnover must be rapid, as the goods being sold are perishable.
  • Fashion industries are similarly reliant on inventory turnover, as the seasonality of both fashion styles and climate create a strong necessity for careful activity management.

• The payoff for customers

• Strategies for external relationships

  • An example of Collaborative Supply Chain Planning (CSCP) is Vendor Managed Inventory (VMI).
  • The supplier is then responsible for creating and managing the inventory replenishment schedule.
  • VMI leads to changes in both the buyers' and suppliers' inventory management activities.
  • This project was intended to reduce inventories across the supply chain.
  • Wal-Mart's in-stock position improved and sales increased, while inventories dropped.

• Supply Chain Management

  • Supply chain management spans all movement and storage of raw materials, work-in-process inventory, and finished goods from point of origin to point of consumption.
  • If, however, a full truckload of a product is ordered to reduce transportation costs, there will be an increase in inventory holding costs, which may increase total logistics costs.
  • Information: Integration of processes through the supply chain to share valuable information, including demand signals, forecasts, inventory, transportation, potential collaboration, etc.
  • Inventory management: Quantity and location of inventory, including raw materials, work-in-process (WIP), and finished goods.

• Financing Company Operations

  • Examples of bootstrapping include: Owner financing, sweat equity, minimization of the accounts receivable, joint utilization, delaying payment, minimizing inventory, subsidy finance, and personal debt.
  • Examples of Bootstrapping: Owner financing Sweat equity Minimization of the accounts receivable Joint utilization Delaying payment Minimizing inventory Subsidy finance Personal Debt