Explain Inventory Control and state its objectives.
Inventory Control is a systematic and detail record of purchase of materials, their storage capacity, quantity in order to supply quantity order for large discounts, handling delivery of materials etc. It is a process which facilitates an entrepreneur in smooth production operation and to take important decisions in a production line.
The objectives of inventory management are:
- To ensure that the supply of raw materials and finished goods will remain continuous so that production process is not halted and demands of customers are duly met.
- To minimise carrying cost of inventory.
- To keep investment in inventory at optimum level.
- To reduce the losses of theft, obsolescence and wastage, etc.
(a) To make arrangement for sale of slow moving items.
- To minimise inventory ordering costs.