Project Report on Inventory Control Techniques

Published: 2021-08-29 14:45:07
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Category: Inventory

Type of paper: Essay

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Inventories constitute most significant part of assets of large majority of the companies in India. Inventory a double edged sword is usually an asset of an organization, if not used properly it will become liability. It is therefore absolutely important to manage inventories efficiently and effectively in order to overcome unnecessary investment.
Improper inventory management affects long term profitability and may fail ultimately. 10 to 20% of inventory can be reduced without any adverse effect on production and sales by using simple inventory planning and control techniques The scope of inventory management concerns the fine lines between replenishment lead time, carrying costs of inventory, asset management, inventory forecasting, inventory valuation, inventory visibility, future inventory price forecasting, physical inventory, available physical space for inventory, quality management, replenishment, returns and defective goods, and demand forecasting.
Balancing these competing requirements leads to optimal inventory levels, which is an on-going process as the business needs shift and react to the wider environment. Inventory management involves a retailer seeking to acquire and maintain a proper merchandise assortment while ordering, shipping, handling, and related costs are kept in check. It also involves systems and processes that identify inventory requirements, set targets, provide replenishment techniques, report actual and projected inventory status and handle all functions related to the tracking and management of material.
This would include the monitoring of material moved into and out of stockroom locations and the reconciling of the inventory balances. It also may include ABC analysis, lot tracking, cycle counting support, etc. Management of the inventories, with the primary objective of determining/controlling stock levels within the physical distribution system, functions to balance the need for product availability against the need for minimizing stock holding and handling costs.
The company has won many laurels, best entrepreneur by the department of industries and commerce (1998 and 1999) and best entrepreneur by the Management Association and Business Deepika. The mission statement of the company is to provide beneficial and innovative product in time to the customers at competitive prices that represent the high value for the money in the industry.
Studies made by various researches indicate that the inventories account for nearly 60 per cent of production cost. The company is trying to improve the overall efficiency and effectiveness of its functions and now introduce a system in inventory management. Inventory Management is the most challenging task for the management. Emphasized the need to maintain inventories to smoothen production and sales operations, which is for the day-to-day use. Holding of inventories is necessary to protect against the risk of unpredictable changes in the market.

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