Production and Operational Management
Documentation of VED Analysis
Nitesh Kumar Pal
Department of Fashion Technology
National Institute Of Fashion Technology, Kangra
The term inventory means the value or amount of materials or resource on hand. It includes raw material, work-in-process, finished goods & stores & spares. Inventory control is the process by which inventory is measured and regulated according to predetermined norms such as economic lot size for order or production, safety stock, minimum level, maximum level, order level etc. Inventory control pertains primarily to the administration of established policies, systems & procedures in order to reduce the inventory cost. Inventory management is the system devised and adopted for controlling investment in inventory. The aim of inventory management is to attain a healthy balance between the cost of having inventory and the cost of not having inventory. Types of Inventory:
* Direct inventories
* Raw material
* Work in progress
* Finished Goods
* Indirect inventories
* Transit or movement inventories
* Buffer inventories or safety stock
* Lot size inventories
* Seasonal inventories
* Fluctuation inventories
* Decoupling inventories
Objectives of inventory control
* To meet unforeseen future demand due to variation in forecast figures and actual figures. * To average out demand fluctuations due to seasonal or cyclic variations. * To meet the customer requirement timely, effectively, efficiently, smoothly and satisfactorily. * To smoothen the production process.
* To facilitate intermittent production of several products on the same facility. * To gain economy of production or purchase in lots.
* To reduce loss due to changes in prices of inventory items. * To meet...