Question

Explain Inventory Control and state its objectives.

Answer 1

Inventory Control is a systematic and detail record of purchase of materials, their storage capacity, quantity in order to supply quantity order for large discounts, handling delivery of materials etc. It is a process which facilitates an entrepreneur in smooth production operation and to take important decisions in a production line.
The objectives of inventory management are:

1. To ensure that the supply of raw materials and finished goods will remain continuous so that production process is not halted and demands of customers are duly met.
2.  To minimise carrying cost of inventory.
3.  To keep investment in inventory at optimum level.
4.  To reduce the losses of theft, obsolescence and wastage, etc.
   (a) To make arrangement for sale of slow moving items.
5. To minimise inventory ordering costs.