Inventory Management | Image Resource: helium10.com To order, store, and to sell a company’s inventory we have to implement a process called Inventory Management. It helps to manage the products which are finished developing. It also helps us to manage raw materials and components. From raw materials to completed products we can use Inventory Management. The two types of methods in this type of management are Just-in-time or JIT and materials requirement planning or MRP.
Inventory Management Core The most valuable asset of an organization is its inventory. And managing the inventory is a very important aspect. Many people count the inventory physically and can implement it in the datasheet. But this process requires a lot of time. Therefore the most efficient way to count the inventory is to use automated Inventory Management systems which are useful in keeping track of real-time assets. By using just three different methods we can account for inventory management. The first one is FIFO( first in first out), LIFO( last in first out), and weighted average costing. Raw materials, merchandise, finished goods, and goods-in-process are responsible for the inventory account management. Inventory Management Procedure How a company uses business depends on the business itself. There are a wide number of methods or procedures for keeping the inventory. The methods which are commonly used are: just in time (JIT), materials requirement planning(MRP), DSI or days sales of inventory, and EOQ or economic order quantity. The JIT method mainly originated in Japan. Toyota Motors invested the whole thing. But we must all know that Maintaining JIT is a risky method. Many organization fails to meet their target and customer demand. This leads to poor customer relationships which in turn helps other industries to dominate. Even if we make a small delay, it will become very difficult. EOQ model is very useful because it helps the company to keep track of its inventory and also allows to add new inventories. Today this type of system is used by small to large organizations. We have to remember to use the proper procedure to implement this type of system. System management requires time and is difficult to implement. It is very important to keep track of every inventory.
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