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What are the objectives of inventory management?

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Question added by Abdou warshan , • مدير إدارة المخازن والنقل , شركة تمكين الدولية للأجهزة المنزلية
Date Posted: 2015/03/05
FITAH MOHAMED
by FITAH MOHAMED , Financial Manager , FUEL AND ENERGY CO for transportion petroleum materials

achieve maximum profit with  minimum resources 

Hany Helmy Haleem
by Hany Helmy Haleem , Director of Warehouses , Nasco Automotive

 

Inventory-A physical resource that a firm holds in stock with the intent of selling it or transforming it into a more valuable state

 

The objectives of inventory management is to :

 

- Improve customer service

 

-   Economies of purchasing

 

-   Economies of production

 

-   Transportation savings

 

-   Hedge against future

 

-   Unplanned shocks (labor strikes, natural disasters,  surges in demand, etc.)

 

-   To maintain independence of supply chain

 

 

Best Regards

Abdou warshan
by Abdou warshan , • مدير إدارة المخازن والنقل , شركة تمكين الدولية للأجهزة المنزلية

The main objective of inventory management is to maintain inventory at appropriate level to avoid excessive or shortage of inventory because both the cases are undesirable for business. Thus, management is faced with the following conflicting objectives:

1. To keep inventory at sufficiently high level to perform production and sales activities smoothly.

2. To minimize investment in inventory at minimum level to maximize profitability.

Other objectives of inventory management are explained as under:-

1. To ensure that the supply of raw material & finished goods will remain continuous so that production process is not halted and demands of customers are duly met.

2. To minimize carrying cost of inventory.

3. To keep investment in inventory at optimum level.

4. To reduce the losses of theft, obsolescence & wastage etc.

5. To make arrangement for sale of slow moving items.6. To minimize inventory ordering costs.

Salah Othman Yousef Alshambaati
by Salah Othman Yousef Alshambaati , مدير ادارة الحسابات , شركة انفال الجديدة للتجارة والمقاولات

I agree with Mr. Hany answer

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