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Introduction to Inventory Control

Inventory management is crucial for companies to balance supply and demand effectively, addressing issues of excess and shortages. Implementing appropriate control systems and forecasting methods can help minimize inventory imbalances caused by random demand fluctuations and lead times. The document outlines various inventory types and decision categories to aid in efficient inventory control.

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49 views2 pages

Introduction to Inventory Control

Inventory management is crucial for companies to balance supply and demand effectively, addressing issues of excess and shortages. Implementing appropriate control systems and forecasting methods can help minimize inventory imbalances caused by random demand fluctuations and lead times. The document outlines various inventory types and decision categories to aid in efficient inventory control.

Translated by

ScribdTranslations
Copyright
© All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd

INTRODUCTION TO INVENTORY CONTROL

Inventory management is one of the most important topics that


companies face today. It is very common to find managers
the business administrators trying to solve the problem of why
they always have very little of what is sold or consumed the most and
Why do they have excesses of what they hardly need? This is a
problem that arises in any company in the industrial sector the
they have to manage daily, supplies, materials,
finished products, tools, materials, etc.
This problem arises from the random changes in demand and
replenishment times for supplies or finished products already for
production delays or delays from suppliers (Lead
Times).
Due to the fact that the factors making it impossible to eliminate a
The company needs to maintain inventories, it is important to define systems.
of control that help us minimize the impact of such factors,
In addition, it should be taken into account that you cannot have more than 3.
INVENTORY MANAGEMENT AND STORAGE
inventory of necessities as this would incur unnecessary costs. The
The key question is then, how much inventory should be kept?
A serious mistake that many companies make is to establish
safety stock or reserves based on their average demand
which causes inventory imbalances when such demand
it presents random variations as usually happens in real life.
The solution to this problem is to implement strategies.
adequate following certain parameters such as: Systems
adequate demand forecasting methods that allow us to foresee the
market variations, measurement of Lead Times, ABC classification
from the articles to establish priorities, definition of places more
adequate within the supply chain, consideration of
aspects such as the product life cycle and generation of
efficiency indicators that consider all variables of interest.
The following are several elements to take into account
which will help reduce the complexity in the management of thousands
of articles.
FUNCTIONAL CLASSIFICATION OF INVENTORIES
It is advisable to follow the following six categories of decisions for
inventory control: cycle inventory, congestion inventory,
safety inventory, anticipation inventory, inventory in
transit and separation inventory. Below is a brief
description of each of them.
Cycle Inventory
It is the result of sorting or producing in batches instead of doing it in one go.
one article at a time. The inventory that is held at a given moment
As a result of these batches, it is called cyclical inventory. The reasons
to restock in batches can be among other (1) decrease of
costs due to economies of scale, (2) large discounts on
purchase or transportation prices and (3) technological restrictions of
batch production.
1.1 CONGESTION INVENTORY
Their inventories are due to items competing for limited capacity.
When multiple items share the same production equipment
the inventories of these accumulate while waiting for the equipment
be available.

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