Category Archives: INVENTORY MANAGEMENT

INVENTORY MANAGEMENT

Approaches The EOQ model em be illustrated by (i) the long analytical approach or trial and error approach, and (ii) the short cut or simple mathematical approach, INVENTORY MANAGEMENT Homework Help Trial and Error (Analytical) Approach Given the total requirements of inventory during a given period of time depending upon the inventory planning horizon, a firm has different alternatives to purchase its inventori

Safety Stock

Safety Stock The economic order quantity and the reorder points as inventory management techniques. have explained to keep the discussion simply, on the assumption of a conditions. That we had assumed (i) constant fixed requirement of inventory and (ii) instantaneous inventory. The assumptions are however, of questionable validity innocturnasituationsons, that is under conditions of uncertainty. For instance, the

Order Point Problem

Order Point Problem The EOQ technique determines the size of the order to acquire inventory so as to carrying as well as the ordering costs. In other words, the EOQ provides an answer to question, how much inventory should be ordered in one lot? Another important question pertaining to efficient inventory management is, when should the order to procure inventory he paid this aspect of inventory management is cover

Limitations

Limitations While using the EOQ model, it should be noted that it suffers from oncoming which are mainly due to the restrictive nature of the assumptions on which it is based, the important limitations are explained below. limitations-homework-help The assumption of a constant consumption usage and the instantaneous of inventories are of doubtful validity. As discussed subsequently deliveries from suppliers may s

Approaches

Approaches The EOQ model em be illustrated by (i) the long analytical approach or trial and error approach, and (ii) the short cut or simple mathematical approach, Trial and Error (Analytical) Approach Given the total requirements of inventory during a given period of time depending upon the inventory planning horizon, a firm has different alternatives to purchase its inventories. For instance, it can buy its en

Order Quantity Problem Economic Order Quantity (EOQ) Model

Order Quantity Problem: Economic Order Quantity (EOQ) Model After various inventory items are classified on the basis of the ABC analysis, the management becomes aware of the type or control that would be appropriate for each of the three categories of the inventory items. The A group of items warrants the maximum attention and the most rigorous control. A key inventory problem particularly in respect of the Gro

Classification Problem ABC System

Classification Problem: ABC System The first step in the inventory control process is classification of different types of inventories to determine the type and degree of control required for each. The, ABC system is a widely used classification technique to identify various items of inventory for purposes of inventory control. This technique is based on the assumption that a firm should not exercise the same deg

TECHNIQUES

TECHNIQUES In the preceding section the objectives of inventory management have been outlined. The financial managers should aim at an optimum level of inventory on the basis of the trade off between cost and benefit to maximise the owner’s wealth. Many sophisticated mathematical techniques are available to handle inventory management problems. But they arc more appropriately a pan of production managemen

Benefits in Sales

Benefits in Sales The maintenance of inventory also helps a finn in enhance its sales efforts. For one thing, if there are no inventories of finished goods, the level of sales will depend upon the level of current production. A firm will not be able to meet demand instantaneously. There will be a lag depending upon the production process. If the firm has inventory, actual sales will not have to depend on length

Benefits in Work in Process

Benefits in Work-in·Process The inventory of work in process performs two functions. In the first place, it is necessary because production processes are not instantaneous. The amount of such inventory depends upon technology and the efficiency of production. The larger the steps involved in the production process, the larger the work-in-process inventory and vice-versa. By shortening the production time, eff