d) Inventory Control: Inventory control involves the systematic location, storage and recording of items and goods in such a manner that desired degree of service can be made to the operating shops at minimum ultimate cost. Inventory control has following functions to perform: To ensure timely availability of materials and to avoid build up stock. To protect the inventories against physical deterioration, loss, leakage etc. To develop policies, plans and standards essential to achieve inventory control objectives. To determine the economic order quantities (EOQ) and economic run lengths (ERL).
e) Disposal of Surplus, Obsolete and Scrap Items:
This is also an
important function of materials management. Holding surplus items, scrap or obsolete items is a costly affair because it includes inventory carrying costs, cost of periodic stock tasking, cost of maintaining records, cost of security etc. f) Material Economics: The function of materials management also includes Value Analysis, Standardization (variety reduction).
NEED OF INVENTORY Inventory may be defined as any resource (raw material, fuels and lubricants, components, spare parts, tools, maintenance consumables, semifinished products, finished products) that has a certain value and can be used at a later time, when the demand for it arises. Inventory can also be defined as physical stock of items that a business or production enterprise keeps on hand for efficient running of affairs or its production. In simple words 250