BUSINESS SYSTEMS & PROCEDURE

PRESENTATION ON

INVENTORY MANAGEMENT
GUIDED BY : PROF. PRASAD AKOLKAR

Project by
• SAMEER PRASAD

• JYOTI SINGH

• PRATIKSHA SALUNKHE

• SKEVIN ATHICKAKUZHI

• MAHESH MESTRY

• MANJIRI AWATE

• ASHISH PAPADKAR

• NEETHU PRASANNAN
WHAT IS INVENTORY MANAGEMENT

• Inventory management is a
systematic approach to obtaining,
storing, and profiting from non-
capital assets (raw materials and
finished goods). The right stock, at
the right levels, in the right
place, at the right time, and at the
right cost.
PURPOSE OF INVENTORY MANAGEMENT

• Protecting against shortages and delays. Stockpiling products can be used as a measure to
reduce impact if there is a disruption in the supply chain. Having inventory mainly helps
with satisfying customer demand. People like being able to get an item as soon as they
pay for it.
• Reducing peak period capacity needs. Having inventory completed and waiting before
peak season hits can reduce the strain on production while meeting higher customer
demand.
• Quantity discounts. Larger orders reduce total processing and shipping costs.
 METHOD OF INVENTORY VALUATION

• FIFO ( First In First Out ) : Product which came first will be released first
• LIFO ( Last in Last Out ) : Products that came last will get released first
• Weightage (Cost/ Price) Method : Products based on Weightage of Price
will be released first, this method is usually used for similar products
where profit differs.
 PURPOSE OF STOCK CONTROL

• The purpose of stock control is to have as much as you need

on hand without having too much inventory to manage or sell.
Inventory management gathers and evaluates data about
demand, turnover rates and inventory levels, giving you the
information you require to place orders when necessary and
sell down existing stock when you can.
TYPES OF INVENTORY/ PRODUCT

• Raw materials : Basic Goods that are later produced into finished goods.
• Parts manufactured in-house : Parts or Goods produced in house for Own
Production use for later
• Works-in-progress inventory : Unfinished items moving through production
but not yet ready for sale
• Finished goods inventory : Finished goods are goods that are ready for sale.
• Inventory for resale : It means goods that are collected from others in other
to resale.
 TYPES OF REPORT MAINTAINED

• Inventory On Hand : inventory on hand report should show how many product units
you have in each store as well as the current stock value.
• Low Stock : This report shows the if the Stock for product is Low or is out of stock
• Product Performance Report : This Report displays how much product has sold for a
certain period which is per week or per day.
• Sales Summary : This report gives a overview of sales for a Long duration
• Sales Report Per Product and Product Type : This report has the record of Sale of
Products as per its Type or category
• Sales Report Per Customer or Customer Group : Here the Data is maintained as per
the customer individual or as per group
 COST FOR INVENTORY MANAGEMENT

• Ordering Cost : Ordering Cost is dependent and varies based on two

factors - The cost of ordering excess and the Cost of ordering too less.
• Carrying Cost : Cost of Holding the Product at Inventory
• Shortage Cost : Cost bared when the product goes out of stock and the
orders get cancelled
ABC ANALYSIS OF INVENTORY

• A-items are goods which annual

consumption value is the highest
• B-items are the interclass items, with a
medium consumption value.
• C-items are, on the contrary, items with
the lowest consumption value.
 SAFETY STOCK

• Protect against unforeseen variation in supply : Maintaining Extra Stock for Unseen Ups
and Downs In future Supply.
• Compensate for forecast inaccuracies : Sale for A month Increases than the Maintained
stock for current month hence safety stock can be used to satisfy Customers
• Prevent disruptions in manufacturing or deliveries : Incase of Safety Stock maintained
any issues during manufacturing or deliveries don’t occur
• Avoid stock outs to keep customer service and satisfaction levels high : When we have
extra stock maintained no customer will go unhappy because even if the monthly target
or expectation gets crossed safety stock helps to serve customers
THANK YOU