INVENTORY MANAGEMENT

Literally, the word ‘inventory’ means anything in stock that can necessarily do a business; however inventory brings a tangible facet of doing business to the table. The inventory includes raw materials, finished goods, and stocks which indeed represent and involve a large portion of business investment and management. Unhealthy inventories can lead up to bad management and high customer turnover rates due to product quality and communication systems which of-course can be affected greatly by unhealthy conditions of the inventory. The focus and objective of the inventory management control is to maintain an optimum level of the inventory and its investment. Many of the businesses today has succeeded in making plans and improvements for their inventory system and management; the management as well as inventory controls work differently and vary greatly from one business to another. Some inventory control models have complicated and complex inventory models while some might have simple and easy inventory models and methods.

How does the inventory management control system work? What are the types?

Generally, inventory management control system works pretty similar for almost all business the differences though, might include a few changes in methods and workouts depending on business motivations, goals, and future accomplishments. Our modern world today consists of a variety of businesses which indeed have different business cultures and styles, which can be seen by their unique practices, rules and regulations, dressing codes, and other factors. The simplest method for inventory management control system works pretty easy; small businesses, shops, partnerships, and other forms of businesses use this method daily. This method can also refer to a visual or a look-se method where the purchase person would review the stock daily to look for items and observe whether they are scarce, overloaded, or if there are any improvements to be done. He also places orders when there is a gap or a need for items in the inventory and when the minimum level is believed to be reached. For the simple method of inventory management control system, records are not a must.

How to control Inventory Management System? (tips and techniques)

• 1. Consider economic purchases as well as the quantity of items or products purchased
• 2. Observe reorder levels and keep schedules on when to order items.
• 3. Always have a safe stock or a minimum inventory in case items ran out of stock immediatelyTo control inventory management system, a business has to consider the amount and the quantity of items ordered to meet the entire needs of a business. The company has to project costs and expenses each time orders are placed in order to manage and control the inventory and reduce as much costs as possible. Sometimes companies would increase their orders and the amount of products and items to reduce costs and expenses but this can lead to having large average stock inventory, which results in increase carrying stock.
• 4. Consider the costs of carrying stocks and orders:
  a. Costs of ordering
  b. Costs of carrying stocks

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