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Inventory and Material Management Notes

The document provides an overview of inventory and material management, emphasizing the importance of tracking stock levels and balancing supply and demand to enhance cost control and operational efficiency. Key concepts include stock levels, reorder points, lead time, and various types of inventory, along with techniques like Economic Order Quantity and Just-in-Time. It also discusses demand forecasting, supplier relationships, technology's role in inventory management, and challenges faced in the field.

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14 views3 pages

Inventory and Material Management Notes

The document provides an overview of inventory and material management, emphasizing the importance of tracking stock levels and balancing supply and demand to enhance cost control and operational efficiency. Key concepts include stock levels, reorder points, lead time, and various types of inventory, along with techniques like Economic Order Quantity and Just-in-Time. It also discusses demand forecasting, supplier relationships, technology's role in inventory management, and challenges faced in the field.

Uploaded by

forworkonly8765
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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Inventory and Material Management - Notes

Inventory Management Overview


- Process of tracking stock levels, ensuring product availability, and balancing supply and
demand.

- Helps in cost reduction, customer satisfaction, and supply chain optimization.

Key Concepts
- Stock Levels: Amount of goods available in inventory.

- Reorder Point: Level at which new stock must be ordered.

- Lead Time: Time taken for an order to be received.

- Safety Stock: Extra stock to prevent stockouts.

- Inventory Turnover: How often stock is sold or used.

Objectives
- Cost control.

- Ensuring product availability.

- Optimizing cash flow.

- Improving operational efficiency.

- Minimizing wastage.

Types of Inventory
- Raw Materials: Basic materials for production.

- Work-in-Progress (WIP): Partially completed goods.

- Finished Goods: Ready-for-sale products.

- MRO Supplies: Maintenance and repair items.

- Transit Inventory: Goods in transit.

Inventory Control Techniques


- Economic Order Quantity (EOQ): Optimizes order size.

- Just-in-Time (JIT): Orders inventory only when needed.

- ABC Analysis: Categorizes inventory by value (A, B, C).


- FIFO: Oldest stock is used first.

- LIFO: Most recent stock is used first.

Demand Forecasting
- Historical Data Analysis: Using past sales trends.

- Qualitative Methods: Expert opinions, market research.

- Quantitative Methods: Time-series analysis, regression models.

Supplier Relationships
- Collaboration: Aligning with suppliers.

- Negotiation: Securing favorable pricing.

- Communication: Keeping suppliers updated.

- Performance Evaluation: Monitoring supplier reliability.

Technology in Inventory Management


- Inventory Management Software

- Barcode & RFID

- Cloud-Based Systems

- AI & Machine Learning

- IoT, Automation, Robotics

- Blockchain & Integrated Supply Chain Systems

- Mobile Apps & Drones

Challenges in Inventory Management


- Demand fluctuations.

- Supply chain disruptions.

- Excess stock management.

Influencing Factors
- Market trends.

- Economic conditions.

- Customer preferences.
Important Formulas
- EOQ Formula: Determines optimal order size.

- Reorder Point (ROP) Formula: ROP = Demand During Lead Time + Safety Stock

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