importance of managing inventory

• importance of managing inventory level

  represent large portion of firm assets

  significant costs in inventory storage

  significant costs in managing and accounting for inventory

  some inventory can become obsolete if not measured well

  too much inventory may tie up money that can be better used elsewehre

  too little -> loss in sales
• how can too much inventory cause issues?

  tie up money that can be better used elsewehre
• how can too little inventory cause issue?

  loss in sales
• inventory levels represent waht?

  large portion of firm assets
• why are there significant costs regarding inventory levels?

  inventory storage

  • managing and accounting for inventory
• inventory procedures?

  perpetual: keep track of level of inventory on hand and re-order points

  Stocktakes: confirm inventory on hand

  Check delivery of inventory against order forms and invoices

  Keep inventory in secure location with appropriate alarm systems in place

  Segregation of duties: different employees are order/receive/pay for inventory

  • reduce error, theft, fraud