Importance of inventory management, Financial Management

Assignment Help:

Q. Importance of Inventory Management

1) Inventory helps in smooth and efficient running of business.

2) Inventory provide service to the customers immediately or at a short notice.

3) Due to absence of stock, the company may have to pay high prices because of piece-wise purchasing. Maintaining of inventory may earn price discount because of bulk purchasing.

4) Inventory also acts as buffer stock when raw materials are received late and so many sales orders are likely to be rejected.

5) Inventory also reduces product costs because there is an additional advantage of batching and. long smooth running production runs.

6) Inventory helps in maintaining the economy by absorbing some of the fluctuations when the demand for an item fluctuates or is seasonal.

7) Pipeline stocks (also called process and movement inventories) are also necessary where the significant amount of time is consumed in the transshipment of items from one locality to another.


Related Discussions:- Importance of inventory management

Explain about the market-based and bank-based systems, Explain about the ma...

Explain about the market-based and bank-based systems. A clear distinction between market-based in USA and UK and bank-based systems as in Germany, Japan and France define by s

Explain the re-measurement and translation process, Explain the re-measurem...

Explain the re-measurement and translation process within FASB 52 of translating into the reporting currency the books of a completely owned affiliate that keeps its books in the l

Random number generation, Random Number Generation Since we have said t...

Random Number Generation Since we have said that competitors' average price, quantity sold and cost behave in a random fashion but follow a normal distribution, if we want to d

What is a security?, What is a security? The Securities are claims on f...

What is a security? The Securities are claims on financial assets.  They can be explained as "claim checks" that give their owners the right to obtain funds in the future.  Sec

How is present value affected by a change in discount rate, How is present ...

How is present value influenced by a change in the discount rate? Present value is oppositely related to the discount rate.  Alternatively, present value moves in the reverse dire

Money and Banking, Using a spreadsheet program or a calculator, solve Tracy...

Using a spreadsheet program or a calculator, solve Tracy’s problem of how often to go to the ATM when the nominal interest rate on her bank account is 10 percent, she spends $30 ea

Which type of financing is appropriate to firm, This case provides the oppo...

This case provides the opportunity to match financing alternatives with the needs of different companies. It allows the reader to demonstrate a familiarity with different types of

Non-interest rate indexes, Generally, an interest rate or an interest...

Generally, an interest rate or an interest rate index is used as a reference rate for However, through financial engineering, issuers have been able to construct

Calculate the average interest rate , At the end of 1922, your great grandf...

At the end of 1922, your great grandfather (g.g.f.) established a trust fund to be used in order to help a later generation of the family obtain a university education. The ultimat

What do you meant by negative externalities, Question 1: i) Is ther...

Question 1: i) Is there a stable and inverse link between unemployment and inflation? ii) The government announces that expansionary policies will be enacted in a view

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd