INVENTORY MANAGEMENT- ARTICLES

LITERATURE REVIEWS

INVENTORY MANAGEMENT

Inventory management is a very important function that determines the health of the supply chain as well
as the impacts the financial health of the balance sheet. Any organization which is into production,
trading, sale and service of a product will necessarily hold stock of various physical resources to aid in
future consumption and sale. While inventory is a necessary evil of any such business, it may be noted
that the organizations hold inventories for various reasons, which include speculative purposes, functional
purposes, physical necessities etc.Inventory can be classdified according to functions. Mainly 1) Input-
that has raw material, packaging materials, local purchased items for productions, consumables for
processing. 2) WIP- semi-finished products, scrap, defectioves. 3) Output- finished goods, FG in transit,
defectives & rejects, sales returns, repaired stocks etc.

https://www.managementstudyguide.com/inventory-management.htm

FINISHED GOOD INVENTORY

All Manufacturing and Marketing Companies hold Finished Goods inventories in various locations and all
through FG Supply Chain. While finished Goods move through the supply chain from the point of
manufacturing until it reaches the end customer, depending upon the sales and delivery model, the
inventories may be owned and held by the company or by intermediaries associated with the sales
channels such as traders, trading partners, stockiest, distributors and dealers, C & F Agents etc.

https://www.managementstudyguide.com/finished-goods-inventory.htm

WHEN TO AVOID HOLDING INVENTORY

Every business organization that is engaged in manufacturing, trading or dealing with salable products
holds inventories in one form another. Inventory is held in the form of raw materials or in the form of
salable goods. Since every unit of inventoried item has an economic value and is itemized in the books of
account of the company, inventory can be considered to be an asset of the company.

Inventory Management is a critical function performed by planners to balance the inventory holding so as
to ensure that optimum inventory levels are maintained. Any excess inventory will result in incremental
costs of maintaining inventory and affects the financials of the company as it blocks working capital.
Under inventory on the other hand can seriously hamper the market share. Any customer order that is not
fulfilled due to a stock out is not at all a good sign. Therefore the responsibility of striking a fine balance in
holding lean inventory calls for smart planning and continuous monitoring of the inventory levels coupled
with quick decision-making.

https://www.managementstudyguide.com/when-to-avoid-holding-inventories.htm
MULTI-BUYER INVENTORY MODEL

We consider a one-vendor multi-buyer integrated inventory model. The vendor seeks to minimize his
total annual cost subject to the maximum costs which buyers are prepared to incur. In order to
implement this model, the vendor only needs to know buyer's annual demand and previous order
frequency, which can be inferred from buyer's past ordering behavior. We find the optimal solution for
the one-vendor one-buyer case, and present a heuristic approach for the one-vendor multi-buyer case.

https://www.sciencedirect.com/science/article/abs/pii/0377221793E0253T

VENDOR MANAGED INVENTORY

As the name implies, vendor-managed inventory ( VMI ) is inventory that is managed by the vendor
(supplier). And while there can be more to it than this, at a minimum this means the vendor determines
when to replenish and how much to replenish. 
Vendor-managed inventory is nothing new; in fact it's been around a long time and is far more common
than you may think. If you ever worked in a restaurant, you would have seen the "bread guy" show up
every day or so, check your inventory (physically look at your breads, buns, etc.), then go out to his truck
and stock you up. In a barbershop, many of the hair products your barber (yeah I'm old school, I go to a
barber) sells or uses are also managed by the supplier. In this case, it’s probably the sales rep for that
product that actually "manages" the inventory, and he may restock the barbershop from the trunk of his
car. At the old independent hardware store, items like nuts, bolts, washers, o-rings, etc. were often
managed by the vendor. In larger businesses, you may have your shipping cartons, office supplies, or
cleaning/maintenance supplies managed by the vendor.

http://www.inventoryops.com/articles/vendor_managed_inventory.htm