Essay on Inventory Managment

According to Investopedia (2014) dictionary, inventory represents one of the most important assets that most business possess, because the turnover of inventory represents one of the primary sources of revenue generation and subsequent earnings for the company’s shareholders/owners. There are several reasons for manufacturers to hold inventories: one is to meet the demand of production and sales operation; the other is to consider the market price. Generally, we would receive a lower price if we buy large stock of goods than a small amount of goods. However, overstocked inventories not only occupy plentiful funds, but also increase the costs including warehouse cost, insurance fee,

Investing and Financing. Firms must finance inventory, usually with a combination of supplier and bank financing. The risk of inventory obsolescence is somewhat high if the product offerings in a particular season do not sell. Firms tend to rent retail space in shopping malls, so they need to engage in extensive long-term borrowing.

To be successful in today’s business environment, an organization must be able to perform certain fundamentals accurately and efficiently. One of these elements is having an effective and efficient Inventory System Management (ISM). ISM enables one to have the knowledge of where his or her inventory is at every step of the way. This allows one to better interact with consumer and make sales. Choosing the right ISM can lead and pave the ground work for future business success and profitability.

Planning and Forecasting is a vital function of management especially as it is related to inventory management. Planning has four processes associated with it. They are establishing goals, formulating strategies, implementing the plan and evaluating its success. The planning process of inventory will assist the organization choose the correct inventory system resulting in reduced costs and increased efficiency. For any business, having large amounts of inventory could prove to be expensive. In most company’s the management team will forecast sales on a monthly basis in order to keep enough inventories to fill customer orders in a timely fashion but not have an overflow of stock. There are various types of

Merchandising inventory is goods that have been acquired by a distributer, wholesaler, or retailer from suppliers with the intent of selling the goods to third parties. (Accountingtools.com, 2015) When choosing the type of method to use for merchandising inventory it is important for the business to understand what type of services or goods that are being provided. This can offer a better insight to the proper and most cost effective method. When deciding there are four types of inventory cost methods to elect from.

Merchandise Inventory is a material acquired by a retailer for the purpose of selling it to the third party. The three methods

Based on the information provided in the above indicated inventory analysis the financial controller and all interested parties within management will be better able to become informed regarding all indicated irregularities, material misstatements or inventory shrinkage . Furthermore, this will assist the management team in understanding and more effectively managing

Inventory management can be defined by how it “involves planning, coordinating, and controlling the acquisition, storage, handling, movement, distribution, and possible sale of raw materials, component parts and subassemblies, supplies and tools, replacement parts, and other assets that are needed to meet customer wants and needs,” (David Alan Collier, 2017). Inventory management used to be about taking notes on cards. Employees would write down the items on a piece of paper. This process obviously took a lot of time and it was easy for shop keepers to miss items. The idea of electric inventory records first came up during the 1930’s but didn’t really take off until 1948 when the first electronic scanner was built.

Setup Costs: costs to prepare a machine or process for manufacturing an order; may be highly correlated with setup time

Second, there is no check on inventory before the warehouse picking and shipping the goods. If the stock on hand is not enough for the sales, the customers should be notified.It is suggested to have inventory control.

Tasks:  What should Alison do? o Develop plans to improve the inventory management o Develop time-based supply strategies to bring competitive advantages to the organization  Identify the functions and forms of inventory  What are alternatives for inventory management? o ABC classification o Supplier-managed inventories (SMI) o Just-on-time or Just-in-time (JIT) o Enhance the forecasting system (factor correlated with inventory variation)  Provide training programs for current and new hiring employees 1

Through the end of the 1980's, most software packages for distributors placed an emphasis on sales and accounting related modules. In the early 1990's, many distributors recognized that they needed help controlling and managing their largest asset, inventory. In response to this need, several computer software companies developed comprehensive inventory management modules and systems. These new packages include many new features, designed to help distributors effectively manage warehouse stock. But after implementing new software, many distributors don't feel that they have gained control of their inventory. These wholesalers continue to face many of the same challenges they experienced with their

Inventory management has two very different, but effective methods: Vendor managed inventory, and consignment inventory. A company may choose to utilize either of these two methods to manage inventory. If a company is able to manage inventory, they will be better able to work the company's capital to the fullest extent. The following paper will identify the differences between the two as well as identify what type of company is best suited for each method.

Managing what's in a warehouse or on the shop floor can be extremely complex if you're looking for optimal cost and supply chain management capabilities( Needleman, 2017 ). Inventory estimation and control is directly impacted a company’s profitability.

Walmart’s inventory management is one of the biggest contributors to the success of the company and integration of technology in promote an effective operational process (Comm and Mathaisel, 2008). The biggest problem of Walmart’s across the world is empty