Question

Due: Thursday, July 16, 2020 at 11:59 pm What is inventory management and why is it important? Explain the different types of inventories maintained throughout a value chain. What are the four categories of inventory costs? Posted Mon Jul 6, 2020 at 9:53 pm Comments There are no comments Write a comment Post

Answer 1

Inventory Management is the administration/supervision of products that a firm holds as non-capitalized resources and that are moved around and sent to a customer.

The different kinds of inventory includes:

1. Raw material Inventory which is the raw materials/segments/ingredients used to produce completed products. This is loaded in getting region once got from the providers.

2. Work In Process Inventory which is the inventory that gets made as middle person get together in the assembling procedure. This is loaded on the shopfloor.

3. Completed Goods Inventory which is the inventory that is put away in distribution center in the wake of assembling and conveyed to customers according to their necessity.

The following are four classes of inventory expenses -

1. Ordering cost - Ordering cost is the expense of putting in a order.

2. Carrying cost - Carrying cost is the holding cost of inventory viz. cost of dealing with, consuming stockroom space, pilferage and losses, oldness and so forth.

3. shortage cost - This is the expense of lost deals because of lack of inventory.

4. Dealing with cost - This incorporate the strategic and transportation cost for example material dealing with.