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Inventory Management System: A Presentation by - Cutm MBA
Inventory Management System: A Presentation by - Cutm MBA
SYSTEM
A Presentation
By_
CUTM
7/10/2012
MBA 1
Contents
• What is Inventory for organization?
• Types of Inventories
2
What is Inventory?
• Inventory is stock of items held to meet future
demand.
Firm or Organization
Work in
progres C
s u
Raw
Finishe s
material W
d o
o
goods m
t
r
k
e
r
i
n
p
r
o 4
Types of Inventories contd.
• Finished Goods
– Completely manufactured products ready for sale.
• Supplied Goods
– Office and plant cleaning materials not directly enter production but
are necessary for production process and do not involve significant
investment.
5
What is Inventory Management?
• Inventory management is all about specifying the size and
placement of stocked goods.
6
Tasks in
Inventory
Management
• Track inventory
– To look after the amount of inventory i.e. stock coming into the
business.
• When to order?
– Specify the duration of getting the inventory.
7
Inventory Management flow cycle
8
Advantages of Inventory Management
9
Inventory Management Models
10
Basic Economic Order Quantity
model
11
Production Order Quantity model
12
Probabilistic Models and Safety
Stock
• Used when demand of inventory is not constant or
certain.
13
reasons for keeping stock
To preserve the Inventory management, collection of
stock should be in solid state. Here are some reasons for
firms to keep the stock,
• Time
– The time lags present in the supply chain, from supplier
to user at every stage, requires that you maintain
certain amounts of inventory to use in this lead time.
• Variations
– Inventory is to be maintained for consumption during
'variations in lead time'.
14
Reasons for keeping stock
contd.
• Uncertainty
– Inventories are maintained as buffers to meet
uncertainties in demand, supply and movements of
goods.
• Economies of scale
– Ideal condition of "one unit at a time at a place, where
a user needs it, when he needs it" principle tends to
incur lots of costs in terms of logistics. So bulk buying,
movement and storing brings in economies of scale,
thus inventory.
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