How do decisions about stock affect other operations. This paper presents a case study for the assembling company on inventory management. Arun kanda, department of mechanical engineering, iit delhi. Process audits should occur at each transactional step, from receiving to shipping and all inventory transactions in between. This paper uses the principles of inventory management and control to develop a system to meet explosive manufacturing and supply. Inventory control process max min inventory control system set minimum and maximum inventory levels for items you want to keep in stock. J principles of inventory and materials management. Smartturn is committed to fostering a selfsustaining community of inventory and warehouse experts through knowledge sharing and learning. Most of the organizations have a separate department or job. By careful attention to each of these critical core principles, your business can increase efficiency and reduce costs. Youll be able to increase your ontime, and accurate shipping percentage, and lower overtime costs.
The answers to these questions embrace the most important issues of inventory management. Principles of inventory management instructor guide version 2. The major responsibility of inventory management is the management of materials and materials systems throughout. In many cases, however,inventory related costs can rival transportation spend as the largest logistics cost and often holds the most opportunity for. Principles of inventory and materials management pdf free. It is proposed to use inventory management in order to decrease stock levels and to apply an agent system for. Inventory management is a very important function that determines the health of the supply chain as well as the impacts the financial health of the balance sheet. Effective inventory management effective inventory management is the result of outstanding inventory control and inventory management. Lecture series on project and production management by prof. Application of inventory management principles for efficient. Principles of inventory and materials management 4th edition.
In this chapter, the concept of inventory is discussed which is central to materials management function. The importance of inventory control in business increased dramatically with the increasing. The book gives a selfcontained introduction to inventory. When the inventory level for an item drops to the minimum, reorder the item designate stocked and nonstock items stocked items you must always have in stock. Youll be able to raise your efficiency in receiving, putaway, picking, shipping and inventory management. Principles of inventory management instructor guide table of. It can have a significant effect, through the inventory policies it. Tersine the university of oklahoma m north holland new york amsterdam oxford.
The major part of this chapter is concerned with describing and illustrating the basic principles of inventory control in the context of differing assumptions regarding knowledge about demand, and the lead time between placing an order for stock replenishment and actually receiving the order. Pdf application of inventory management principles for efficient. Inventory management, stock management, inventory control and stock control are terms which can. That is knowing, what products are out there, have much you have each item and where it is. The definition of inventory and various types of inventories raw materials, finished goods, inprocess inventory, mro inventory, etc. Inventory management needs to recognise it cannot work in isolation within the logistics system. Principles of inventory and materials management 4th edition tersine, richard j. Provide appropriate levels of information to be available to challenge, and where appropriate, override system decisions. This method is referred to as a hybrid system and will minimize the safety stock and also take fluctuation in the demand into consideration. Pdf the principles and strategies found in material management are comparable and analogue with the data management. Basic principles of inventory control springerlink. Provide for exception reporting of nonroutine situations promptly. Pdf application of inventory management principles to explosive. Whatever your motivation, we invite you to read this ebook and raise the level of operational excellence in the inventory and warehouse management innovation communities.