Inventory Control Introduction

Need help with your homework? Look no further! Our subject experts are ready to effortlessly handle your assignments, so you can finally say goodbye to stress and hello to top grades.

Please enable JavaScript in your browser to complete this form.
Click or drag files to this area to upload. You can upload up to 3 files.
⚡Get a response in under 15 min

Whenever a business is set up, the primary concern that is to be taken into consideration is, how long the business would run, what would be the amount of profit associated with that business, and what investment is to be made in regards to that business.

To ensure that this business works in the correct manner, it is important that certain analytical decisions are taken based on details that are available. It is courtesy to these decisions that the business proceeds in a specific manner and the given resources can be correctly utilized by any firm.

Resources with a firm:

Every firm before starting off their business deals are entrusted with a certain amount of resources in their domain. Certain analytical decisions have to be taken in regards to that so that a firm gets maximum benefit, using minimal of those resources.

In case of a business unit, this is termed as inventory.

Understanding the concepts of inventories:

Inventory implies to that list of goods and property, which is associated with a particular business and it is very important to note, how this amount is being spent. Given that this is a fixed amount for any venture, unless additional amount is added to get more of these goods.

Thus, inventory can be stated as that amount of stock on hand that is used by a particular company for carrying on with its production process. It is very important that inventories of physical goods are maintained in a proper manner that is to be required by both government as well as commercial sectors. At times, even the military sector is in need of such inventories to ensure that their total amount does not lessen.

In case of any lack of such inventories, proper replenishment is to be done to help in further production process.

What is inventory control?

Since, from the very beginning it is taken that inventories are fixed for any business institution; it can be taken as a control that is exercised upon the inventories, to maximize its usage. When maximum usage is undertaken, maximum profits are to be derived without compromising on the satisfaction levels of the concerned clients.

Thus, it goes with the business principle of maximum benefit with a limited cost.

Terminology associated with inventories:

Here are some of the terms that are used specifically in regards to inventories. For any student to understand the concepts in the best manner, it is important that these terms are clarified in the best possible manner.

  • What do you mean by Demand?

In this case, the dimension of demand is associated with a quantity that has been placedon order. Demand, in this case, is categorized as per the rate, pattern and size. It so happens that demand varies from period to period, or at timeit is kept constant during a certain time period. It is dependingon information available on the category of demand that it can be segregated.

Deterministic demand: It implies that demand size is well known to the concerned people.

Probabilistic demand: In this case, the demand size is not known by the concerned party. In such a scenario, a probability distribution is to be used for finding out approximate quality.

The rate of demand is equal to the size of demand on a per unit time basis.

  • What do you mean by Lead Time?

This is the time period that is taken into consideration during placement of an order (i.e. the administrative order being taken into consideration) to the time of delivery (i.e. when the order will reach the concerned party).

There are times when this period of lead time is known by the concerned parties. This helps in preparing themselves regarding payment, or further orders. This is known as deterministic model and lack of knowledge of this result in deriving answers by making usage of random variable property.

It is length of lead time that is used for determining inventory levels.

  • What is the concept of Replenishment associated with?

Given that they come randomly or in a flow, this includes that amount of order that has to be received into the inventory. In certain cases, this can both be consistent or random over a certain period.

  • What are the Costs associated with this concept? Determine the various types of costs?

There are a number of costs associated with maintenance and usage of inventories. They are:

Initial Purchase cost which implies amount of money that is spent in regards to buying of goods. When any good is obtained from an external source, there is a specific unit price associated with it. In case of those items that are produced on an internal basis, this cost implies unit production cost that is associated with it.

Revenue cost or Selling price or Salvage cost is associated with that scenario, when a company is lost on its sale and is not able to fulfill its demands. In this case revenue cost that is associated is included in company’s inventory policies.

Setup cost is that amount which is used for setting up of the concerned unit.

Ordering cost is that amount which is to be paid by the concerned party in regards to order that has been placed by an external body.

Stock out cost or Shortage cost implies moments when internal or external aspects are taken into consideration. External shortage is a situation when a consumer’s orders are left incomplete while in case of Internal shortage, certain orders within a particular organization are not completely fulfilled. In case of loss of money or any lack of goodwill, this category of cost is considered.

Storage cost or Holding cost or Inventory cost implies investment in the inventory that is quite in proportion with level of inventory and time associated with it.

  • What are the Constraints associated with inventories?

Quite like every aspect, there are certain specific constraints associated in this case known as space and capital constraints. It is based on these concepts that certain factors are determined as to how to make correct usage of these inventories.

  • What are the Orders associated with this concept?

There are specifically certain orders that are available in regards to this. One has to be concerned while dealing the placed orders.

Economic Order Quantity as the name suggests is that amount that has to be placed in such a manner that quantity that is obtained is optimized as well as total cost associated with buying of inventories is minimized.

Order Cycle refers to that time period which is spentbetweenplacement of 2 orders.

Re-order level is that amount which is taken as a level between the minimum and maximum stock level that is available, and at that point specifically when manufacturing units and activities would begin to replenish their amount of inventory.

  • What is the Time Horizon that has to be taken into consideration?

This is specifically that time period, which can be both finite and infinite, during which this whole usage procedure is concerned.

For any student, having a clear idea of these details is of prime importance. Also, for any business venture, following these details are of prime necessity in case you wish to ensure that your business is reaching the correct dimension.

Necessity of inventories:

There are primary reasons as to why this inventory is needed by most of the business ventures.

  • For a smooth running of business and efficient business administration, it is very important that inventories are required to be in the best of condition.
  • There are a number of charges that are associated with a business institution, and it all comes down to correct usage of inventories. It to a great extent economically considers transportation and other clearing and forwarding charges.
  • With help ofthese inventories, bulk purchasing can be done and therefore it to a great extent helps in economizing the business and garnering maximum profits.
  • The best part of inventories is that; they are suitable for long term plans in any business organization.

However, with every necessity comes a set of associated problems and in case of inventories, it is no less.

Inventory issues:

Problems that are faced by a company in regards to inventories those are available with that company.

Problem 1: Which is that ideal time for placing an order and ensuring that production of that particular good runs in a correct manner?

Problem 2: What is the ideal quantity that is to be produced during a particular time period and what is the time interval which has to be kept for taking an order?

Once answers to these queries are placed, production process can be continued in an ideal manner.

Thus, both for a student who is starting out, as well as for business institutions, a detailed knowledge of these concepts is of prime importance.

 

Links of Previous Main Topic:-

Links of Next Statistics Topics:-

Homework Blues?

Get expert help with homework for all subjects.

  • NPlagiarism-free work
  • NHonest Pricing
  • NMoney-back guarantee

Latest Reviews

Solved Sample Works

Accounting Homework

Corporate Accounting Sample

Biology Homework

Genetics Assignment Sample

Essay Writing Help

Business Plan Sample

Homework Help FAQs

Our Answers to Your Questions

How do I submit my homework?
K
L

Getting homework help is very simple with us. Students can either send us the homework via email or they can upload it to our online form here. For a quicker response, You can also chat with us at WhatsApp and submit homework directly. You are sure to get a response from our side within 10 minutes.

How much will my homework cost?
K
L

The cost of paying someone to do your homework varies depending on the service and the type of assignment. We have listed our standard pricing plans for popularly used writing services. For other kind of assignments, You can get a free instant quote from us using our online form.

We also accept partial payment to start working on your assignment help. You can pay the remaining amount when your task gets completed. No pressure of up-front payment. No hidden order costs.

Can I receive help with my homework anytime?
K
L

Yes, you can receive help with your homework anytime with us. Our online homework help services are available 24/7, allowing you to receive assistance with your homework anytime, anywhere.

For urgent homework requests, reach out to us through our LiveChat or WhatsApp channels and one of our friendly support agents will assist you in finding the right expert for your online homework help request immediately. With our services, you can rely on 24/7 availability and meeting deadlines.

Are online homework websites budget-friendly for students like me?
K
L

Yes, Our Online Homework Help websites are an affordable solution for you as a student. Compared to traditional tutoring services, MyHomeworkHelp prices their homework help services honestly and within the budget of college students. This makes it easier for you to receive assistance with your homework without breaking the bank.

What is your plagiarism-free policy?
K
L

At myhomeworkhelp, we take plagiarism very seriously and ensure that all solutions provided by our tutors are original and authentic. Our tutors are trained to provide custom-made solutions, tailored specifically to meet the requirements of each student. We do not provide pre-written papers. All our homeswork solutions are made from scratch, guaranteeing 100% orignal homework answers.

Additionally, we have strict plagiarism-detection tools in place to check all submissions for authenticity.

Is using an Online Homework Help Service cheating?
K
L

Using online homework help services is not equivalent to cheating. Our services are intended to support students with their homework and provide them with the resources they need to succeed academically. With the help of our online homework help services, students can receive immediate assistance with their homework from any location, at any time.

At myhomeworkhelp, we are committed to promoting academic integrity. Our tutors provide solutions that serve as guides for drafting your own work. It is not acceptable to submit someone else's work as your own, as this constitutes academic plagiarism.

Can I chat with my tutor?
K
L

Using our secure chat board, you can now chat directly with your assigned tutor. The chats are encrypted both ways to secure your privacy. This makes your contact with the tutor directly & confidentially, so you can better explain any requirements or changes if needed or just need updates.

You can't contact the experts outside of chat board platform. Sharing any personal information, including but not limited to contact information, goes against our Terms and Conditions and therefore may result in permanently blocking you from the platform. We take any personal data very seriously and we do it for the safety of our users.

Know more about chat board here.

What is your money-back guarantee policy?
K
L

It’s worth noting that our online homework help service rarely leads to disappointment among students. Our expert tutors, along with our support and quality assurance team, are dedicated to providing the best possible experience for our customers. However, if for any reason a student is unsatisfied with their homework help solution, we offer unlimited revisions until they are fully satisfied.

In the rare event that a student remains unsatisfied even after revisions, we offer a money-back guarantee. We want all of our students to feel confident and secure when they turn to us for assistance with their homework, and this guarantee is just one way that we demonstrate our commitment to providing the best possible service. If you have any concerns about our services or the quality of the work you receive, please contact us for support.

What is the expertise of the tutor assigned to do my homework?
K
L

At myhomeworkhelp, we take pride in our team of qualified and experienced tutors. All of our tutors undergo a rigorous selection process and are required to have a minimum of a master's degree in their respective fields. Additionally, they must pass a series of tests to demonstrate their proficiency and ability to deliver quality work. We believe in transparency and providing our clients with the best possible service. You can be confident in the expertise of the tutor assigned to do your homework.

What about privacy & confidentiality?
K
L

Using My Homework Help is absolutely safe. We care about your security, therefore we encrypt all personal data to make every user feel safe while using our services and we don’t share any personal information with any third parties without your permission. Your credit card information is not stored anywhere at My Homework Help, and use of PayPal relies on their secure payment networks. Your identity, payment and homework are in safe hands. You can always be certain of getting professional help and remaining anonymous, while using My Homework Help.