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
- Protection against fluctuations in demand
- Better use of men, material & machines
- Protection against fluctuations in output
- Control of stock volume
- Control of stock distribution
Major activities of inventory control
- Planning the inventories
- Procurement of inventories
- Receiving and inspecting the inventories
- Storing and issuing the inventory
- Recording the receipt and issues of inventories
- Physical verification of inventories
- Follow-up function
- Material standardisation and substitution
Steps in Inventory Control
- Deciding the maximum-minimum limits of inventory
- Determination of Reorder point
- Determination of Reorder quantity
- ABC Analysis
Purpose of inventory
- To maintain independency of operation
- To meet variation in product demand
- To allow flexibility in product scheduling
- To provide a safeguard for variation in raw material delivery time
- To take advantages of economic purchase order size
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