Inventory Of Inventory Management System Essay

Inventory Of Inventory Management System Essay

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Inventory management system has been practiced in many organizations from various industries. Given the diverse and multi-layered supply chains handling different inventories, organizations utilizing inventory management system can still manage efficiently and effectively their supply and demand flow within crucial transactional activities. In the following discussions, this paper examines the concept of inventory management, different inventory types and inventory management processes, and the function criteria to be considered when selecting inventory management system. Inventory is comprised of an ideal resource of any form that has potential economic value and regarded as locked up capital (Saxena, 2009). From the materials management perspective, an inventory consists of a list of item of store or materials held in storage to meet future demands of production, repairs, maintenance, and construction (Lang, 2009). Meanwhile, inventory management is the process of handling and managing the materials kept in storage that can be stocks of finished goods, semi-finished products, and raw materials (Narayan & Subramanian, 2009). In most cases, the aim of inventory control is to generate little inventory that will result in lower interest charges on capital locked up, maximize opportunity cost of locked up capital, and enable efficient supply chain management (i.e. this reason does not apply to inventories that gain value over time) (Bidgoli, 2010; Narayan & Subramanian, 2009). Thus, in order to achieve this purpose, inventory management ensures continuity between functions of company 's strategic goals, sales forecasts, sales and operations planning, and production and materials requirement planning (Saxena, 2009).Scholars have indic...


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...s against unexpected demand and lead time increases that may cause stock outs (Bidgoli, 2010). Lastly, management of transportation inventory comprising of inbound and outbound stocks that have not yet reached their point of delivery (Wisner & Stanley, 2007, p. 180). Inventory management is a crucial step in securing an efficient and effective supply chain flow and material flow in an organization. However, inventory management system to be adopted is relative to the needs and nature of business activities of the organization. Given the many types of inventories to be managed, the processes of handling inventories are all integrated in the four fundamental phases of supply chain management. Thus, organization should evaluate their inventory management needs first before selecting the inventory management system to be adopted to ensure effective and efficient outcomes.

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Inventory Of Inventory Management System Essay

- Inventory management system has been practiced in many organizations from various industries. Given the diverse and multi-layered supply chains handling different inventories, organizations utilizing inventory management system can still manage efficiently and effectively their supply and demand flow within crucial transactional activities. In the following discussions, this paper examines the concept of inventory management, different inventory types and inventory management processes, and the function criteria to be considered when selecting inventory management system....   [tags: Supply chain management, Supply chain, Inventory]

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