O Describe elements of inventory management.
o Describe the meaning of the category of inventory and explain why it is critical to manage each element.
o Explain why accurate forecasting is so important to sales enhancement, customer satisfaction, and cost control.
1. Describe elements of inventory management
Following elements are considered in inventory management:
Order Quantity: This is how much material should be ordered
Order Point: When should order be placed?
Safety Stock: How much buffer stock of inventory should be maintained in hand
Purchasing: What is the method of purchasing? How are suppliers evaluated? Are purchasing practices in-line with cost of purchase?
Warehouse: Is the space utilized effectively? Are records safe?
Transaction system: Are transactions well recorded in the system? Can sale or receipt of any item be traced through transaction system?
2. Describe the meaning of the category of inventory and explain why it is critical to manage each element.
Category of inventory implies grouping of inventory items under a common head. Inventory category makes it possible to group ...
Inventory category makes it possible to group inventory items into classes. For example