Inventory Control

Inventory Control is the supervision of supply, storage and accessibility of items in order to ensure an adequate supply without excessive oversupply

Objectives of inventory control

1. Protection against fluctuations in demand
2. Better use of men, material & machines
3. Protection against fluctuations in output
4. Control of stock volume
5. Control of stock distribution

Major activities of inventory control

1. Planning the inventories
2. Procurement of inventories
3. Receiving and inspecting the inventories
4. Storing and issuing the inventory
5. Recording the receipt and issues of inventories
6. Physical verification of inventories
7. Follow-up function
8. Material standardisation and substitution

Steps in Inventory Control

1. Deciding the maximum-minimum limits of inventory
2. Determination of Reorder point
3. Determination of Reorder quantity
4. ABC Analysis

Purpose of inventory

1. To maintain independency of operation
2. To meet variation in product demand
3. To allow flexibility in product scheduling
4. To provide a safeguard for variation in raw material delivery time
5. To take advantages of economic purchase order size