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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...

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...

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...

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...

Benefits in Purchasing

Benefits in Purchasing If the purchasing of raw materials and other goods is not tied to production sales, that is, a firm can purchase independently to ensure the most efficient purchase, several advantages would become available. In the first place, a firm can...

Benefits of Holding Inventory

Benefits of Holding Inventory The second element in the optimal inventory decision deals with the benefits associated with holding inventory. The major benefits of holding inventory are the basic functions of inventory. In other words, inventories perform certain...