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    Manage and Control Your Inventories Properly

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    Rendado Archelyn G.
    This document discusses inventory management and control. It explains that inventory management means maintaining the right levels of raw materials, work in progress, and finished goods to meet production and sales targets. It notes that businesses should avoid overstocking or understocking inventory. The document then provides tips for controlling inventory, such as knowing when and how much to order. It distinguishes between basic stock goods that are regularly used and seasonal goods that have fluctuating demand.

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    Manage and Control Your Inventories Properly

    Uploaded by

    Rendado Archelyn G.
    34 views2 pages
    This document discusses inventory management and control. It explains that inventory management means maintaining the right levels of raw materials, work in progress, and finished goods to meet production and sales targets. It notes that businesses should avoid overstocking or understocking inventory. The document then provides tips for controlling inventory, such as knowing when and how much to order. It distinguishes between basic stock goods that are regularly used and seasonal goods that have fluctuating demand.

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    This document discusses inventory management and control. It explains that inventory management means maintaining the right levels of raw materials, work in progress, and finished goods to meet production and sales targets. It notes that businesses should avoid overstocking or understocking inventory. The document then provides tips for controlling inventory, such as knowing when and how much to order. It distinguishes between basic stock goods that are regularly used and seasonal goods that have fluctuating demand.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    34 views2 pages

    Manage and Control Your Inventories Properly

    Uploaded by

    Rendado Archelyn G.
    This document discusses inventory management and control. It explains that inventory management means maintaining the right levels of raw materials, work in progress, and finished goods to meet production and sales targets. It notes that businesses should avoid overstocking or understocking inventory. The document then provides tips for controlling inventory, such as knowing when and how much to order. It distinguishes between basic stock goods that are regularly used and seasonal goods that have fluctuating demand.

    Copyright:

    © All Rights Reserved
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    Download as docx, pdf, or txt
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    Rendado, Archelyn G.

    BTLE HE-I

    Manage and Control Your Inventories Properly

    Inventory management is a systematic approach to sourcing, storing, and


    selling inventory—both raw materials (components) and finished goods (products). In business
    terms, inventory management means the right stock, at the right levels, in the right place,
    at the right time, and at the right cost as well as price.

    When you are in a business, you need to keep sufficient stocks of raw materials, in-
    process goods, and finish goods in order to meet your production and sales targets. This is
    called Inventory. Inventory management control means that you must take care not to have too
    much, or too little of the required stocks. In other words, neither overstock nor under-stock.

    Keeping far more stocks than what is needed is having working capital tied up and not
    earning money for you. In fact, it is costing you more money because goods and raw materials
    tend to deteriorate while in stock. For example, iron and steel part rust, wood rots and
    becomes stained, goods for sale become stained and dirty and can only be sold at a discount.

    On the other hand, you must be on guard against having too little of the materials and
    supplies you need. It is always a good idea to have a little more than you estimated to use.
    Having so much extra materials, goods in process, and finished products allows you too:

     Meet sudden increase in sales demand; and


     Make up rejected or damaged parts and products

    Running short of raw materials suddenly will slow down or disrupt your production. Workers will
    be idle while waiting for the materials to arrive. This is time and money wasted. It might also mean a
    potential loss of sales or costumers.

    How to Control the Inventory

    Inventory control or stock control can be broadly defined as "the activity of checking a


    shop's stock." It is the process of ensuring that the right amount of supply is available within
    a business.

    The basic idea behind the inventory control is to operate your business effectively with
    the least amount of stock. To be able to do this, you should know:

     When to order
     How to often order
     How much to order
    To be able to answer the above questions, you should know how to distinguish between
    basic stocks goods and seasonal goods because each kind is controlled in a different
    way.

    Basic stocks goods are those, which are either sold at as much the same rate at
    all times or regularly used in production. For instance, in a food store, these would
    include rice, flour, cooking oil, and the like. In a garments store, these would be t-shirts,
    socks, and underwear. In a furniture factory, these include standard-size planks,
    plywood sheets, nails, screws, glue, and a varnish.

    Seasonal goods are those that move quickly at some time and slowly than the
    others. In a bookstore, these would include notebooks, books, and other supplies that
    sells heavily just before and during the opening of classes. In a garments store, these
    would be warm clothing, umbrellas, and raincoats during or just before the rainy
    season. In a toy factory, these could be colored plastic pellets for use in the production
    of plastic toys before the Christmas season.

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