INVENTORY CONTROL

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M.COM First Year Tutor Marked Solved Assignment

Course Code: IBO – 05
Course Title: International Marketing Logistics
Assignment Code: IBO-04/TMA/2019-20
Coverage: All Blocks

IBO – 05 International Marketing Logistics Solved Assignment for 2019-20

Q4.) Write short notes on the following :

(b.) Inventory Control

Ans: Inventory control is the technique of maintaining stock keeping items at the desired level, whether they be raw materials, goods in process, or finished products.

The term 'inventory' refers to the stock of raw materials, parts, and finished products held by a business firm. It is the aggregate quantity of materials, resources, and goods that are idle at a given point of time. 

The term inventory control is used to cover functions that are quite different and are related to one another only in that they both require the maintenance of adequate records of inventory as well as receipt and issue corresponding to these two functions.

Objectives of Inventory Control:

(a.)To meet unforeseen future demand due to variation in forecast figures and actual figures.

(b.) To meet the customer requirement timely, effectively, efficiently, smoothly, and satisfactorily.

(c.) To smoothen the production process.

(d.) To reduce loss due to changes in prices of inventory items. 

(e.) To minimize losses due to deterioration, obsolescence, damage, pilferage, etc.

Importance of Inventory Control:

The aim of holding inventories is to allow the firm to separate the process of purchasing, manufacturing, and marketing of its primary products. Inventories are a component of the firm's working capital and as such represent a current account.

Inventories are also viewed as a source of near all cash. The purpose is t achieve efficiencies in areas where costs are involved. The scientific inventory control results in the reduction of stocks on the one hand and a substantial decline in critical shortages on the other.