Essay on Inventory Managment - 1206 Words

Inventory itself is a list of products that a company has available for sale to customers. So what is Inventory Management? By definition according to BusinessDictionary.com, â€Å"Inventory Management is policies, procedures, and techniques employed in maintaining the optimum number or amount of each inventory item†. There are many other definitions such as â€Å"a retailer seeking to acquire and maintain a proper merchandise assortment while ordering, shipping, handling, and related costs are kept in check† or â€Å"all functions related to the tracking and management of material†, and in business management, the management of †a list of goods and materials held available in stock†. Inventory Management is necessary in order to provide continuous†¦show more content†¦According to InventoryManagement.com â€Å"The scope of inventory management also concerns the fine lines between replenishment lead time, carrying costs of inventory, asset management, inventory forecasting, inventory valuation, inventory visibility, future inventory price forecasting, physical inventory, available physical space for inventory, quality management, replenishment, returns and defective goods and demand forecasting.† Inventory is usually never the direct responsibility of the finance department. They have more of an oversight or policing responsibility for the management of inventory. Inventory is more the responsibility of functional areas of manufacturing or operations. The executives in those areas are the ones who set the levels and how the inventory is to be managed. From there, is the levels get too high, the finance department steps in and calls attention to the problem and points out that the problem might be that it could be managed more efficiently. The finance department will also monitor levels of lost and outdated inventory to make sure that the levels don’t become too high. They need to write off this inventory but has to make sure that it isn’t excessive. Finance people also monitor the counts or physical inventories in order to reconcile what is actually on hand with what has been recorded in the company’s records. The finance department does not manage the inventory personally but it does have to make sure that the peopleShow MoreRelatedSupply Chain Design601 Words   |  3 Pagesworking at a constant output rate. Shortages and surpluses are absorbed by fluctuating inventory levels, order backlogs, and lost sales (Jacobs amp; Chase, 2011 pg.534). 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