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Copyright: International Trade Centre Managing Inventory Gao Yongzheng This Module will help you to: Content Overview Unit 1 Introduction Unit 1 Introduction What is inventory? What is inventory? Inventory – or stock, as it is also called – is defined in supply management as the stored accumulation of material resources to be used in a transformation process. Why keep inventory ? An enterprise may hold inventories for many good reasons, the most common of which is to be a buffer in the supply chain. Why keep inventory ?(cont.) The specific reasons includes : What is inventory Management? Inventory Management is simply the way that the accumulation of the inventories is optimized so that the business can satisfy its customers’s demands for the delivery of a required quantity of products, at the right time and the minimum cost to business. What does inventory Management include? Why is it important ? Inventory Management will have some very important effects on: Recall and Summary What is inventory? Now that inventory manage-ment is very important to a company, then How to do it well? Unit 2 Warehouse and Inventory Operations Mentoring movements Mentoring movements For each location where materials are held, stock record balances need to accurately reflect what is physically in inventory. Receipt issue of inventory Receipt issue of inventory – cont. Systems to replenish inventory Re-order level (fixed order quantity, variable order interval) How much to order Balance amongst the cost of holding stock shortage cost and purchasing cost ordering cost carrying cost and find out to the most economic order quantity (EOQ) Recall and resume Mentoring movements Unit 3 Managing and forecasting inventory Lead-time management Unit 4 Inventory Planning Service level policies Unit 4 Inventory Planning – cont. Debenture or loan security clauses Unit 5 Warehouse planning and systems Warehouse location acquistion options Review and summary Unit 1