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Copyright:InternationalTradeCentre107December2023ManagingInventory

GaoYongzhengCopyright:InternationalTradeCentre207December2023ThisModulewillhelpyouto:ForecastinventoryrequirementsOptimiseinventorylevelBuildanintentorymanagementplanDesign&ManagewarehouseoperationsIncreasetraceability&reducepartsvarietyCopyright:InternationalTradeCentre307December2023ContentOverviewUnit1IntroductionUnit2WarehouseandInventoryOperationsUnit3ManageandForecastingInventoryUnit4InventoryPlanningUnit5WarehousePlanningandSystems--5Units:Copyright:InternationalTradeCentre407December2023Unit1IntroductionWhatisinventory?Whykeepinventory?WhatisinventoryManagement?Whyisitimportant?WhatdoesinventoryManagementinclude?Copyright:InternationalTradeCentre507December2023Whatisinventory?Inventory–orstock,asitisalsocalled–isdefinedinsupplymanagementasthestoredaccumulationofmaterialresourcestobeusedinatransformationprocess.

Itincludes:

Rawmaterials–theinventoryofindividualingredientsorcomponentsusedinproduction.

Workinprocess(WIP)--theinventoryofpartiallyproducedproductsatvariousstagesinthemanufacturingprocess.

Finishedgoods--completedproducts,orproductsthathavebeenmanufactured.Copyright:InternationalTradeCentre607December2023Whykeepinventory?Anenterprisemayholdinventoriesformanygoodreasons,themostcommonofwhichistobeabufferinthesupplychain.Supply

SellProductionFirstProcedureLastProcedureRawmaterialsinventoryWIPinventoryFinishedProductsinventoryCopyright:InternationalTradeCentre707December2023Whykeepinventory?(cont.)Thespecificreasonsincludes:PreventfromshortageofgoodsQuickdeliveryandraisecustomersatisfactionContinuousorbest-scalebatchproductionLessenpurchasetimesandtherelatedcostPurchasepriceadvantageAndsoon………Copyright:InternationalTradeCentre807December2023WhatisinventoryManagement?

InventoryManagementissimplythewaythattheaccumulationoftheinventoriesisoptimizedsothatthebusinesscansatisfyitscustomers’sdemandsforthedeliveryofarequiredquantityofproducts,attherighttimeandtheminimumcosttobusiness.ProductDeliverytoCustomersRequiredQuantityMinimumCostRightTimeOptimumInventoryAccumulationCopyright:InternationalTradeCentre907December2023WhatdoesinventoryManagementinclude?Analyzingthebuild-upandevaluatingtheneedforkeepinginventoryinthesupplychainForecastingdemandformaterialsandcomponentsDevelopmentofinventorymonitoringSupplyplanningandcontrolmechanismsAlsodealingwithphysicalinventoryhandlinglocationsandfacilitiesCopyright:InternationalTradeCentre1007December2023Whyisitimportant?InventoryManagementwillhavesomeveryimportanteffectson:CustomerservicelevelSmoothproductionCost&profitCashflowAndsoon………

Soinventorymanagementisveryimportantinacompany!Copyright:InternationalTradeCentre1107December2023RecallandSummaryWhatisinventory?Whykeepinventory?WhatisinventoryManagement?Whyisitimportant?WhatdoesinventoryManagementinclude?Copyright:InternationalTradeCentre1207December2023Nowthatinventorymanage-mentisveryimportanttoacompany,then

Howtodoitwell?Ithink,thefollowingunitswilltellussomegoodanswers.Let’sgoontoUnit2!Copyright:InternationalTradeCentre1307December2023Unit2WarehouseandInventoryOperationsMentoringmovementsMeasuring&evaluatinginventoryReceipt&issueofinventorySystemstoreplenishinventoryHowmuchtoorderCopyright:InternationalTradeCentre1407December2023Mentoringmovements

Foreachlocationwherematerialsareheld,stockrecordbalancesneedtoaccuratelyreflectwhatisphysicallyininventory.

Inaddition,inventorybalancesheldintheaccountingrecordsneedtobecapableofbeingreconciledwithphysicalstockcountsundertakenduringauditandperiodicstocktakingactivities.

Somentoringmovementsisnecessarytokeeptheinventorybalancestobecorrect.Copyright:InternationalTradeCentre1507December2023Receipt&issueofinventoryNotificationofgoodsreceiptReceiptofcopyofpurchaseorderAcknowledgementSchedule/plandeliveryDeliveryStorage/putawayInspectionUnloadingReceiptCopyright:InternationalTradeCentre1607December2023Receipt&issueofinventory–cont.CostallocationUserdeterminesrequirementRequisitionauthorizedPresentedtostoresIdentificationofthegoodsAdjustmentofstockrecordsDelivery/collectionPickingIssueCopyright:InternationalTradeCentre1707December2023SystemstoreplenishinventoryRe-orderlevel(fixedorderquantity,variableorderinterval)Periodicreview(fixedorderinterval,variableorderquantity)Demand-drivenleansupplysystems(ordersplacedintheprecisequantityandtimerequiredforproduction)Copyright:InternationalTradeCentre1807December2023HowmuchtoorderBalanceamongstthecostofholdingstock&shortagecostandpurchasingcost&orderingcost&carryingcostandfindouttothemosteconomicorderquantity(EOQ)ThecommonformulatocomputeEOQis:EOQ=Squareroot(2Co*D/Pi)Copyright:InternationalTradeCentre1907December2023RecallandresumeMentoringmovementsMeasuring&evaluatinginventoryReceipt&issueofinventorySystemstoreplenishinventoryHowmuchtoorderCopyright:InternationalTradeCentre2007December2023Unit3ManagingandforecastinginventoryLead-timemanagementEnterpriseresourcemanagementDemandforecastingtechniquesCopyright:InternationalTradeCentre2107December2023Unit4InventoryPlanningServicelevelpoliciesCategorisationtechniquesTraceability&varietyreductionCodingsystemsInsuranceCopyright:InternationalTradeCentre2207December2023Unit4InventoryPlanning–cont.DebentureorloansecurityclausesTheinventorymanagementplanPerformanceanalysis&reportingDisasterrecoveryplanningCopyright:InternationalTradeCentre2307December2023Unit5WarehouseplanningandsystemsWarehouselocation&acquistionoptionsWarehousedesignWarehouselayout

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