Inventory Management

The primary purpose of inventory management is to specify the size and placement of stocked goods to protect the regular and planned course of production against the random disturbance of running out of materials or goods.

Inventory is the stock of goods or a list of goods, particularly in accounting language it refers to stock of finished goods.

The functions of inventory include meeting anticipated customer demand, smoothing production requirements, decoupling operations, protecting against stock outs, taking advantage of order cycles, hedging against price increases, permitting operations, and taking advantage of quantity discounts.

<p>The types of inventory include raw material inventory, work-in-process inventory, maintenance/repair/operating supply (MRO) inventory, and finished-goods inventory.</p> Signup and view all the answers

<p>Raw material inventory refers to materials that have been purchased but not yet processed. It can be used to decouple suppliers from the production process, although the preferred approach is to eliminate supplier variability.</p> Signup and view all the answers