 The functions of Inventories.

 Types of inventories
1) Raw Material
2) Work –in – progress
3) Finished goods
4) Cash and marketable securities
 Transactions motives
 Precautionary motive
 Speculative motive
 Contractual requirements
  Ordering costs
 Carrying costs
a) Storage and handling costs
b) Obsolescence and deterioration costs
c) Insurance
d) Taxes
e) The cost of the funds invested in the
Inventories
f) Financing costs of inventories.
 Stock out costs
 Lead times
 Sources and level of risks
 Static versus dynamic problems
 Replenishment rate
 Explosion process
 Past usage Methods
 Value-volume analysis
 ABC Approach
 HML classifications
 XYZ Classifications
 VED Classifications
 FSN Classifications
 SDE and GOLF Classifications
 SOS classifications
 Basic EOQ Model
 Graphic solution
 Extension of the basic EOQ Model
1) Nonzero Lead Time
2) Quantity discounts
3) Probabilistic Inventory control Models
4) Just in time Inventory management systems
 Store requisitions
 Receiving reports
 Balance of stores form
 Material requisition forms
 Control account
 Physical counting
 Visual review
 Two- bin –system
 Minimum- maximum system
 Periodic order system
 Average cost methods
 FIFO Inventory method
 Base stock method
 LIFO Inventory method