Din Inventory

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Submitted to:

Miss. DEVKI Mem

Submitted By:

DINESH SHARMA

BHOPAL

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Inventory + Management

-: Inventory :-

A detailed list of all the items in stock.

-: Management :-

The act of managingsomething

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INVENTORYMANAGEMENT

Properly maintainingadequate stocks to

ensure uninterrupted

service

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Inventory ManagementInvolves..

What and how much stock you have

When to order fresh supplies

What and how much has beenordered, when it was ordered

Where all supplies are stored

When and how much fresh stock wasreceived, and by whom

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Why ?Inventories Management

To Improve customer service

Economies of purchasing

To continuous Supply of material. Transportation savings

Hedge against future

To avoid both over-stocking and under-

stocking of inventory.

To maintain independence of supply chain

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Inventory Supply Chain

Raw

Materials

Works

in

Process

Finished

Goods

Finished

Goods in

Field

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Inventory Costs

Carrying costCarrying cost

cost of holding an item in inventorycost of holding an item in inventory

Ordering costOrdering cost cost of replenishing inventorycost of replenishing inventory

Shortage costShortage cost

temporary or permanent loss of salestemporary or permanent loss of saleswhen demand cannot be metwhen demand cannot be met

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Cost Model

Order Quantity,Order Quantity, QQ

AnnualAnnualcost ($)cost ($)

Total CostTotal Cost

Carrying Cost =Carrying Cost =

CCccQQ

22

Slope = 0Slope = 0

MinimumMinimumtotal costtotal cost

Optimal orderOptimal order QQoptopt

Ordering Cost =Ordering Cost =CC

oo

DD

QQ

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MethodsInventory Management

Determination of Stock levels Standard price method

Average Price Method JIT Control System Inventory Report ABC Analysis

LIFO FIFO EOQ

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How ?

Manage InventoryStock Card Simple, heavyweight cards

Kept for each item in stock

Stock Book or Computer Record

listing of all items in the laboratory Update monthly after physical count

Use information from stock cards

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Stock Card:

Item Name: __________ Unit: __________

Manufacturer: ________________________

Minimum Stock (Re-Order Level): ___________

Date Received

From

Issued

to

Quantity

Received

Quantity

Issued

*Balance Lot # Signature

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Classifying Inventory

Items ABC Classification (Pareto Principle)

A Items:very tight control, complete and accuraterecords, frequent review

B Items: less tightly controlled, good records, regularreview

C Items: simplest controls possible, minimal records,large inventories, periodic review and reorder

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ABC Analysis Example

1010

2020

3030

4040

5050

6060

7070

8080

9090

100100

Percentage of itemsPercentage of items

Perce

ntage

ofdollar

value

Perce

ntage

ofdollar

value

100100

9090

8080

7070

6060

5050

4040

3030

2020

1010

00

+Class C

Class A

+Class B

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It assumes earliest goods purchasedare

the first to be sold

FIFO Method

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It assumes latest goods purchasedare

the first to be sold

LIFO Method

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Problems inInventory Management

When to place an order

How much to order

Where to store Stock storage and holding cost

Risk deterioration in quality

Risk of obsolescence Risk of price decline

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Key Messages..

Maintain an adequate inventory at all time

Dont let any item run out before re-order.

Never order more than your storagespace. Never order of expired goods.

All items in the inventory must beaccounted for and recorded.

Always inspect new shipment beforeaccepting.

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\..Thanks../