There are three techniques for inventory management: ABC Approach Economic Order Quantity Model Managing Derived-Demand Inventories The ABC (Always Better Control) Approach It is a simple approach in which the main idea is divide the inventory into three (or more) groups based on the quality, quantity or significance of their usage. In some cases, companies […]Continue Reading... No Comments.
There are two basic types of costs associated with current assets. Carrying costs Shortage costs Carrying costs Carrying costs represent all of the direct and opportunity costs of keeping inventory on hand. These include: Storage and tracking costs Insurance and taxes Loss due to obsolescence, deterioration, or theft The opportunity cost of capital on the […]Continue Reading... No Comments.
Inventory refers to all the materials the company posses during different stages of the production. Inventory Types It is normally classified into three categories. Raw materials Work-in-progress Finished goods Raw materials refer to the initial basic products that are used to develop the end product. For a Steel company, the raw material is iron ore. […]Continue Reading... No Comments.
After designing the operations systems, it is very important to constantly check the status of the system and improve the same to achieve faster and more efficient outcome. Inventory management Inventory Management is a key process which has direct impact on the profit/loss of a company and is an important financial parameter. Ineffective inventory management […]Continue Reading... No Comments.