Importance Of Inventory Management

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THE IMPORTANCE OF INVENTORY MANAGEMENT FOR SUCCESSFUL OPERATIONS

EDDIE D. DIAZ LEON
October 14

Abstract:

Inventories are tangible goods that are kept for sales within the ordinary course of the business or to be consumed in the productions of goods or services for a later commercialization. Inventories comprehend, in addition to the raw materials, products being processed, and finish products (end item), merchandize for sale, materials, spare parts, accessories to be used during production of goods fabricated for sale (profit) and or presentations services (marketing products), packaging, shipping containers, or simply transit inventories.

The baseline of all commercial enterprise is the “Buy and Sell” of products and services; there is the importance to have a good inventory management. This accountability management will allow the company or firm to maintain timely control as well as remain knowledgeable and well inform about the where does the company stand economically after conducted the inventory. Also the inventory constitute items of current assets that are readily available for sale, meaning all the merchandise still in the warehouse also known as shelf or stock items, that are valued at the cost of acquisition, pending to be distributed and generate profit for the company.

THE PURPOSE OF INVENTORY

So why do you need inventory? In a just- in- time manufacturing environment, inventory is considered waste. However, in environments where an organization suffers from poor cash flow or lacks strong control over (1) electronic information transfer among all departments and all significant suppliers, (2) lead times, and (3) quality of materials received, inventory plays important roles (Muller, 2001).

INVENTORY CONTROL

Accounting for inventories comprises very important for the accounting of goods, for the sale of inventory is the heart of the business. Inventory is usually the largest asset on their balance sheets, and



Bibliography: Dolan, R., Simon, H. (1996). Power of Pricing: How Managing Price Transform the Bottom line. New York, NY, USA. Moya, J. (1999). Control de Inventario Investigacion de Operaciones 4. (1era ed). Costa Rica. Muller, M. (2011). Essentials of Inventory Management (2nd ed). New York, NY, USA. Nagel, T., Hogan, J. & Zale, J. (2011). The Strategy and Tactics of Pricing (5th ed). One Lake street, NJ, USA.: Prentice Hall. Waters, CDJ. & Waters, D. (1992). Inventory Control and Management. Department of the Army. Field Manual FM 4-40 (10-1) Quarter Master Operations. October 2013. Chapter 2. US General Accounting Office. Inventory Management: DOD Can Build on Progress in Using Best Practices to Achieve Substantial Savings. (1995). https://www.udemy.com/blog/inventory-management-techniques/ http://www.investopedia.com/terms/l/lifo.asp http://www.accountingtools.com/retail-inventory-method

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