Inventory Control

• Inventory control are items that a firm need to produce for or supply to customers
• Can be split into three different types

  • raw materials
  • work-in-progress
  • finished goods
• It is the management of how much inventory is held by a business
• Maximum stock level the most stock a business wants to have at one point
• Minimum stock level is the lowest level of stock that a business wants to have in a given time
• Re-order level is the level at which new stock is ordered, this is determined by the lead time of suppliers
• Lead time is the time it takes for an order to be fulfilled - how long it takes for delivery of stock from the time the order is placed
• Re-order quantity is the amount of products ordered from the supplier to replenish stock
• Buffer stock is the lowest level of stock a business will hold, this should be the same as the minimum level of inventory
• Inventory rotation is the term used to describe using old inventory before new inventory to make sure inventory wastage is kept to a minimum
• Supply chain management

  • choosing and working with suppliers in an effective way that maintains inventory in your business
  • reliability, flexibility, cost, reputation, quality and speed of delivery