Archive about 'Inventory Control or Management'

What are the advantages and disadvantages of using the Periodic Review Inventory control system

Tweet   ADVANTAGES DISADVANTAGES 1 All stock items are reviewed periodically so that there is likely to be less obsolete stocks 1 In general larger stocks are required, as re-order quantities must take account of the period between reviews as well as lead times 2 Economies in placing orders may be gained by spreading the […]

What are the advantages and disadvantages of using the Re-order Level Inventory control system

Tweet   ADVANTAGES DISADVANTAGES 1 Lower stocks on average 1 Many items may reached re-order level at the same time, thus overloading the re-ordering systems 2 Items ordered in Economic quantities via the EOQ calculation 2 Items come up for re-ordering in a random fashion so that there is no set sequence 3 Somewhat more […]

In Inventory control, what the assumptions underlying the Economic Order Quantity(EOQ)

Tweet Economic order quantity is defined as the ordering quantity which minimises the balance of cost between inventory holding costs and re-order costs.Underlying assumptions in an Economic Order Quantity model are: That there is a known, constant stockholding cost That there is a known, constant ordering cost, That rates of demand are known, That there […]

In Inventory control, explain what are stock-out costs and give examples of stock-out costs

Tweet Stock-out costs are costs associated with running out of stock Examples of stock-out costs are: Lost contribution through the lost sale caused by the stockout Loss of future sales as customers go elsewhere Loss of customer goodwill Cost of production stoppages caused by stock-out of  work-in-progress or raw materials Labour frustration over stoppages Extra […]

List Of Topics Under The Heading Stock/Inventory Management/Control

Tweet Click to the respective topic on Inventory Management/Control Content Page On INVENTORY MANAGEMENT/CONTROL 1.0 What is stock and the reasons for holding stock or inventory 2.0 What are the cost of holding stock What are stock-out costs and give examples of stock-out costs 3.0 What are the underlying assumptions used in Economic Order Quantity […]

Questions & Answers To Stock Control

Tweet Three Questions On Store Control Question No 1 You just joined an engineering company. The company set up a department to deal with stock control. Your boss asked you to narrate the functions of the stock controller and the importance that this department must operate efficiently. Question No 2 (a)You are the Accountant to […]

Stock Control (Part 1)

Tweet Before we move to the types of Stock Control methodology, let’s look at some of the following terms used in Stock Control System. Terms Meaning/Definition Lead or Procurement time In terms of days, weeks, month, etc. Period of time between Ordering whether external or internal to replenishment ie the goods are available for use. […]

What Are The Costs Of Holding Stock?

Tweet Once we understand properly the total costs of holding stock, we will able to enhance our appreciation for better inventory control re: to maintain stock at a proper level to meet the company’s business requirements. The costs of holding stock can be categorized into 3 types: (A) COSTS OF HOLDING STOCK Also known as […]

Accounting For Stock/Inventory: What Is Stock And Why Hold Stock ( Part 1)

Tweet WHAT IS STOCK/INVENTORY? Stock/Inventory forms part of the operating cycle of the business. The enterprise purchases stock from the supplier in raw material form, convert it into work in progress and finally finished goods for resale to customers. Stock/inventory is part of the Current Asset Category of the Balance Sheet. To define stock, it […]