Successful inventory management involves creating a purchasing plan that will ensure that items are available when they are needed (but that neither too much nor too little is purchased) and keeping track of existing inventory and its use.
DEFINITION of 'Inventory Management' The overseeing and controlling of the ordering, storage and use of components that a company will use in the production of the items it will sell as well as the overseeing and controlling of quantities of finished products for sale. A business's inventory is one of its major assets and represents an investment that is tied up until the item is sold or used in the production of an item that is sold. It also costs money to store, track and insure inventory. Inventories that are mismanaged can create significant financial problems for a business, whether the mismanagement results in an inventory glut or an inventory shortage.
Successful inventory management involves creating a purchasing plan that will ensure that items are available when they are needed (but that neither too much nor too little is purchased) and keeping track of existing inventory and its use. Two common inventory-management strategies are the just-in-time method, where companies plan to receive items as they are needed rather than maintaining high inventory levels, and materials requirement planning, which schedules material deliveries based on sales forecasts.
No business can survive very long without an effective program of controls over the parts and materials that are used in producing or distributing goods and services of the firm. Like many other things that depend on human interpretation, “control” means different things to different individuals.
This is an introductory course for you, the warehouse or stockroom manager, the person in charge of what comes in and goes out of your company. You want a smooth and cost-effective operation, with enough products on hand to satisfy needs without stockpiling too much.
This course will discuss all aspects of inventory management, including common terms, the inventory cycle, how to maintain inventory accuracy, and what some of the latest trends are.
- Understand terms that are frequently used in warehouse management
- Identify the goals and objectives of inventory management and measure your process against these goals
- Calculate safety stock, reorder points, and order quantities
- Evaluate inventory management systems
- Identify the parts of the inventory cycle
- Better maintain inventory accuracy