Inventory Management

Literal meaning of Inventory is detailed list of all items in stock. List of items can be list of goods and materials that are available in stock. In North America inventory term is used synonymously with stock. And the same is used as asset in accounts terms

Inventory management is the curriculum or the program which provide learning of management of sales, purchases and payments of goods and materials. Inventory management is about determining the size and arrangement of goods and materials in stock. Inventory management is required at different placement so that the regular production of final product is not disturbed due to shortage of inventory. The scope of inventory management also concerns with the following issues like replacement lead time, carrying costs of goods and materials, asset management, inventory estimation, inventory valuation, inventory visibility, future inventory price estimation, space available for inventory, quality management, refilling, returns, defective goods and demand estimation. Poising these requirements provides optimal inventory levels. Inventory management includes systems and processes which determine inventory requirements, set objective, provide replacement techniques and report real and planned inventory status. It also includes handling all functions related to the mapping and management of material like tracking of material moved into and out of inventory locations and the resettling of the inventory accounts.  Inventory management control inventory level to balance the goods needed for product availability versus the need of minimizing inventory handling and holding cost.

There are 3 reasons for maintaining inventory first is time, time interim in supply chain from supplier needs to maintain a definite amount of goods or raw material which is called lead time. Other reason for maintaining inventory is to cope with uncertainty of demand, supply and disposition of goods and materials. Last reason for maintaining inventory is economies of scale that is idea of maintaining one unit at a time and at a place where user needs it, and when user needs it, it account a huge cost in logistics.

Inventory management helps in management of invoices, purchase orders, receiving lists, payment receipts. Inventory management helps to configure warehouse, which in turn help to create revenue for your company. The Inventory Management helps in controlling operating costs. Inventory Management contains the following components such as Inventory Management Definition, Inventory Management Terms, Inventory Management Purposes, Definition and Objectives for Inventory Management, Organizational Hierarchy of Inventory Management, Inventory Management Planning, inventory Management Controls for Inventory, Determining Inventory Management Stock Levels