Importance Of Inventory Control

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Inventory control is the process employed to ensure the control of the stock in the company. The end result of effective control is to maximize a company's use of inventory. The goal of inventory control is to generate the maximum profit from the least amount of capital invested in inventory or stock without affecting customer satisfaction levels and fulfilling orders to customers resulting in loss of sales. Stock control starts the moment the goods arrive at the warehouse, depot manufacturing plant or on the premises, it ends the moment it leaves the premises or is sold and dispatched. Given the impact on customers and profits, inventory control is one of the main concerns of any business that have large amounts of cash locked in inventory or stock, such as retailers and distributors.

Inventory control is about knowing where all your inventory or stock is and ensuring everything is accounted for at any
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This can involve a broad array of actions, such as using production cells to work on subassemblies, shifting the work area into a smaller space to reduce the amount of inventory travel time, reducing machine setup times to switch to new jobs, and minimizing job sizes.
• Reorder point:
A key part of inventory control is deciding upon the best inventory level at which to reorder additional inventory. If the reorder level is set very low, this keeps the investment in inventory low, but also increases the risk of being out of stock, which may interfere with the production process or sales to customers. The reverse problems arise if the reorder point is set too high. There can be a considerable amount of ongoing adjustment to reorder levels to fine tune these issues. An alternative method is to use a material requirements planning system to order only enough inventory for expected production levels.
• Bottleneck
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