1. INVENTORY MANAGEMENT
By,
Suhaib
Nasar
Rayees
Shiny
Vasanth

2. INVENTORY

3. What is “Inventory” ?
Inventory or stock refers to the goods and materials that
a business holds for the ultimate purpose of resale (or
repair).

4. What is “Inventory Management” (IM)?
It is all about knowing what is
on hand , where it is in use,
and how much finished
product results.

6. What is the main objective of (IM) ?
The main objective of inventory management is to
replace a very expensive asset called “Inventory” with a
less-expensive asset called “Information”. In order to
accomplish this objective, the information must be
timely, accurate, reliable and consistent.

7. PURPOSE OF INVENTORY MANAGEMENT
•HOW MANY UNITS TO
ORDER ?
•WHEN TO ORDER ?

8. Why Management Inventory ?
The major reason for managing inventory is to reconcile the following
potentially conflicting objectives :
1. Maximizing Customer Service
2. Maximizing Efficiency of purchasing and production
3. Minimizing Inventory Investment
4. Maximizing Profit

9. INVENTORY CATEGORIES
There are 5 types
RAW MATERIAL
WORK-IN-PROCESS
FINISHED GOODS
DISTRIBUTION INVENTORY
MRO ( MAINTENANCE , REPAIR & OPERATING)

10. TWO COMPONENTS OF INVENTORY
SAFETY STOCK
CYCLE STOCK

11. IMPORTANCE
OF
INVENTORY MANAGEMENT

12. •Inventory management plays a big role in all that takes
place. What you can realistically keep on hand and what
is too much makes all the difference. Knowing how long it
will take to get something will make all the difference in
knowing when to order more of a certain product.

13. •For manufacturers, inventory includes raw materials
used to make and assemble products. For resellers, it
includes products you acquire to resell to customers. In
either case, you need inventory to earn revenue.

14. •The firm has to maintain adequate inventory for smooth
production and selling activities.
• It has to minimize the investment in inventory to
enhance firm's profitability.
•Inventory management helps in maintaining a trade off
between carrying costs and ordering costs which results into
minimizing the total cost of inventory.

15. •Inventory management facilitates maintaining adequate
inventory for smooth production and sales operations.
• Inventory management avoids the stock-out problem that
a firm otherwise would face in the lack of proper inventory
management.
• Inventory management suggests the proper inventory
control system to be applied by a firm to avoid losses,
damages and misuses.

16. Customer Service: Customer Service is the ability of a
company to satisfy the needs of the customer.
Inventory Management helps achieve this in several
ways, including delivering in a timely manner,
buffering against uncertainty, and providing variety to
meet individual customer needs.

21. Finally, inventory management has to do with keeping accurate records of
finished goods that are ready for shipment. This often means posting the
production of newly completed goods to the inventory totals as well as
subtracting the most recent shipments of finished goods to buyers.

22. 