Q:

What are inventory management objectives?

A:

Quick Answer

According to Careerride.com, the objective of inventory management is to maintain inventory at an approved level to avoid excess or shortage of inventory. Inventory management systems reduce the cost of carrying inventory and ensure the supply of raw material and finished goods remains continuous.

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Inventory management systems reduce the total cost of keeping inventory and reduce the likelihood of shortages. The process of inventory management is usually carried out using microcomputers with complex models of inventory control too complicated for manual calculations. Not only does this eliminate human error, it also improves the efficiency of a storage facility, such as a factory or warehouse.

The five main types of inventories tracked by inventory systems include raw materials and purchases parts, partially completed goods, finished goods, goods-in-transit and replacement parts. The operations manager is responsible for keeping the cost of ordering and carrying inventory within reasonable bounds and using inventory management systems to develop reliable demand forecasts and lead times. These systems also provide sales and operations planning, production planning and material requirements. According to Indian Institute of Materials Management, how the company operates and their standards will influence the area of emphases for market demands. Demands are subject to change depending on trends.

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