Overview of Inventory Management

From the flow chart above, the Production Planning and Inventory Control Processes covers manufacturing, storage, and related areas. Specifically, the production planning controls the designing and management of the entire airplane manufacturing processes input material scheduling and acquisition, manufacturing, design, and material handling. The inventory control is on the design and management of storage procedures for the raw materials inputs in the airplane manufacturing processes, work-in-progress inventories, and final products.

Although Lynair’s current inventory management practices prove functionality over the last 20 years, there are five feasible options that will drastically improve parts accountability, and the amount of time spent on producing requisitions and purchase orders. The findings revealed a significant amount of time spent locating parts, and creating a requisition request for parts needed to complete an order even though there are many viable ways to improve operations. The five recommendations include; utilizing current software capabilities that are currently not being used; having noteworthy vendors implement their designed reordering systems; further review outside software systems to support inventory

Description. Perpetual Inventory Method (PIM) is known to be used by many financial institutions. PIM system maintains an up-to-date record of accurate level of goods at hands by ensuring that stocks are accounted for at all times (Dey-Chowdury, 2008). The process includes details of all recording purchase and sales receipts, and issues and

“There are two relevant financial aspects of inventory. First, the accounting measures of inventory stocks and flows affect both the income statement and balance sheet. Second, the level of inventory held affects the amount of capital needed as well as the income of the period” (Bierman &

Logistics is the management of inventory at all levels. “Inventory can represent any where from 5 to 30 percent of a manufacture’s total assets and may represent half of a retailers assets.” ()Inventory is one of the more visible forms of waste within supply chains. The driving factor behind inventory is customer demands. The goal of any company who wants to stay in business is to have the product in the right place at the right time for the right cost. This leads to companies trying to forecast for future demands. Forecasting is never exact and demands are always over or under what was forecasted. In my job as a command Readiness Spares Package manager we utilize past fiscal year demands to forecast for the future fiscal year. Although I utilize several different analysis systems to forecast demands; it is never accurate. The goal is to get the forecast as close to the future demands to eliminated customer wait time and save money. Many wholesalers

Inventory valuation is a financial method which assist the companies in providing monetary value to the products which make up the inventory of the company. The most important asset of the companies are their inventories. The measurement of the value of the inventory is essential to make correct financial statements. In case the measurement of the inventory is not proper, the revenues will not match properly with expenses, this will affect the busienss decisions of the company.

No one method is one hundred percent of the time going to work without a hitch. There can be flaws and uncertainties with demand and forecasting. This is why it is imperative to ensure you have a system in place that will be utilized by your inventory management team.

“Inventory management is a core operations management activity” (Stevenson, 2016). The Inventory Management and Control needs to be designed to meet the demand of the marketplace and still be able to support the company, and any plans to expand, etc. The structure of inventories is important for the supply chain in order to have an effective material flow and order fulfillment. In the case for Harvey Industries, the inventory control system would prompt the stockroom supervisor, purchasing and manufacturing manager to place orders for goods to be replenished, whenever one of them finds the materials have been depleted. Often, prompting trade-offs in inventory and poor inventory management results in a lower productivity value in operations, decreasing customer satisfaction resulting in an increase in operating costs.

Inventory management can be difficult in today's economy where sales can fluctuate and seasonal sales come and go. Inventory management can present barriers to success with unavailable or inaccurate data, inability to integrate total cost measures, inability to measure product enhancements or new products, no agreement on when to measure or record, and not enough organizational commitment (Smeltzer, 2003). Inventory technology models can present problems with Economic Order Quantity (EOQ) calculations, inaccurate inputs, and conflict with corporate strategies and goals (Piasecki, 2012). Without proper management, the organization could end up with excessive underselling stock and shortages of selling stock.

Every company will have different degrees of inventory management based on operational load and requirements, but nearly all businesses define inventory management in similar ways. An appropriate definition for inventory management based on Lynair operational functions can be found at Investopedia.com where its definition reads, “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.” Specifically to the company, the inventory processes that were reviewed included four different aspects; purchase, reception, distribution and management of inventory. Each aspect provided numerous findings to the overall logistical operating picture of Lynair’s inventory management procedures, and based on the findings there are five recommendations listed in the discussion below that can assist Lynair in their pursuit for gaining further logistical efficiencies.

Due to the increasing globalization of markets, the level of competition has increased considerably; thus, leading to increased inventory management complexity. Indeed, complexity has several negative consequences including high operation costs, time delay, customer dissatisfaction, inventory shortage, excess inventory, lack of collaboration, cooperation, and integration among supply chain participants (Hudnurkar, Jakhar and Rathod). A supply chain comprises of several business partners who work together either directly or indirectly. The interaction between these parties is characterized by the flow of information, material, and finances. These flows may lead to complexity if there is a lack of information within the participants. Notably, inventory management complexity is closely related supply chain management costs. An increase in complexity is known to result in higher supply chain costs. As such, this paper evaluates some of the causes of inventory management s complexity and their possible remedies.

C.Y.D. Liu and Keith Ridgway Reviews inventory policies and lot-sizing techniques in a cutting tool manufacturer

Title: Authors: Tutor: Date: Subject terms: Improving Inventory Management in Small Business: A Case Study Lining Bai and Ying Zhong

Inventory participates as a main character in the setup of many businesses and manufacturing firms. In production, inventories of natural resources permit enterprises to function autonomously of their sources of provisions. Daily processes are not reliant on transports from supplies hence the reserve of the essential materials is preserved and used as required. Lacking inventory control, millions of dollars could be lost a year as of non-accountability of supplies and imprecise checks and balances. The practice of control and administration of inventory is an important aspect of the success or failure of any business (H. Quesada-Pineda, n.d).

As above stated management problem the study was carried to know how inventory management helps in proper maintenance of working capital, so the title of this study is “inventory management and its effect on working capital”