Presentation on Inventory Management

by group-F
Roji Dhakl
Sabina Shrestha
Sangita Mahat
Sanjeet Rai
Sanskriti Bhattarai
Anyone,
what is stock ?
What is Inventory ?
 At first, let me make sure you about stock inventory
Stock
• Stock includes finished products, parts, materials—whatever you sell
to customers. The more stock—or products—you sell, the more
revenue your business generates.
Inventory
• Inventory includes finished products and all the assets a business
owns or uses to complete production. There are four main types of
inventory.
 Inventory
The accounting of items, component parts and raw
materials a company uses in production or sells.
“Inventory” refers to the act of counting or listing items.
Inventory is the term for the goods available for sale and
raw materials used to produce goods available for sale.
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Inventory can be valued in three ways.
 The first-in, first-out (FIFO) method says that the cost of goods sold is
based on the cost of the earliest purchased materials, while the carrying
cost of remaining inventory is based on the cost of the latest purchased
materials.
 The last-in, first-out (LIFO) method states that the cost of goods sold is
valued using the cost of the latest purchased materials, while the value of
the remaining inventory is based on the earliest purchased materials.
 The weighted average method requires valuing both inventory and the
cost of goods sold based on the average cost of all materials bought during
the period.
 Objectives of inventory management?
To maintain inventory at appropriate level to avoid excessive or
shortage of inventory because both the cases are undesirable for
business.

To keep inventory at sufficiently high level to perform production

and sales activities smoothly.
To minimize investment in inventory at minimum level to maximize
profitability.
 Types of Inventory

Raw materials,
work-in-progress,
MRO and
Finished goods,
Inventories are also classified as merchandise and manufacturing
inventory.
1.The raw materials:- Used to make fan motors,
compressors, or devices might include:- Metal, Plastic, Fiber
or other materials 
2.Work in Progress (WIP):- Work-in-process, inventory is
still in production.
3. Maintenance, Repair, & Operating Supplies (MRO):- Items
that support production but are not part of the finished
products. Some examples of MRO items are lubricants, coolants, uniforms and gloves, nuts, bolts, and
screws.
4.Finished Goods:- Completed products that are packaged
and ready to be sold.
 Benefits of Inventory Management

Accurate Order Fulfilment:- With an effective inventory

management system, you can easily track the stock in the warehouse.
Better Inventory Planning and Ordering:- Striking a balance
between the demand and supply is extremely crucial for businesses,
thus, inventory management provides aid in better planning and
ordering of stock items.
Organized Warehouse:- A good inventory management strategy
leads to an organized fulfilment center. An organized warehouse
results in more efficient present and future fulfilment plans.
Minimize the Blockage of Financial Resources:- With proper
inventory tracking module, business owners can take quicker
decisions about the stock lying in the warehouse more wisely
Increased Customer Satisfaction:- Since a systematic and robust
inventory tracking system will give you a comprehensive view of
your stock at-hand, it yields in an increased customer satisfaction.
 Why Inventory Management ..
Cash Flow:- Inventory control and planning allows small
businesses to manage their cash flow opportunities. By having
better control of their inventory, they can know exactly how much
inventory they will need and when they need it. This can free up
other capital to re-invest in other areas of the business.
Business intelligence:- An inventory control and planning
solution allows small businesses to gain insights into the fast-
selling products. This allows them to adjust their product line and
to make quick and smart business decisions.
Maximize profits:- By being able to make better business decisions
the inevitable outcome for a small business will be an increase in profits.
This is because the stock in their inventory will only be stock that’s
selling.
Limits employee mishandling:- Without inventory control, the
business owner would be none-the-wiser. By limiting the ability of the
employee to steal, the employer is reducing potential ‘hidden’ costs.
Reduce labor costs:- These include the time spent counting stock
and the transportation of stock. Employing an intelligent inventory
planning and control solution can significantly reduce all these labor-
intensive activities.
 Techniques
The push strategy is a method of inventory control in which items are “pushed”
down from manufacturer to store, warehouse or business.
The pull strategy is a method of inventory management in which a store,
warehouse or businesses “pulls” an item only when a customer or employee
orders it.
The just-in-time inventory strategy is like the pull strategy: businesses order
inventory “just in time” to fulfill a customer’s order or a business need.
Successfully implementing a just-in-time inventory management strategy requires
reliable suppliers, vendors and third-party logistics partners. Without them, a
business could fail to meet customer demand, which is always a recipe for
disaster. 
 Conclusion

Inventory management is to help businesses easily and

efficiently manage the ordering, stocking, storing and using
of inventory. By effectively managing your inventory,
you'll always know what items are in stock, how much of
them there are, and where they are located.
Any Questions… ?

Thank you !