inventory management presentation pdf free

Free Download Inventory Management PPT with PDF

Free Download Inventory Management PPT Presentation with PDF : Inventory management is obliged for the goods in inventory, also to their inward flow and outward flow. It looks after the units in a firm and makes sure that they are in a moderate amount which does not affect the performance of a company. If it comes to a company or its origin then the department of management is a genuine soul of a firm’s growth and success.

Inventory Management PPT Presentation with PDF

So, because of it, a separate management department has to be established and this also enhances the efficiency of a company. Like other branches of management, inventory management is also a vital branch of management that aids in the good results of a company.

Functions of Inventory Management:

The functions of inventory management are as below:

• An inventory manager should manage the time well and should know about each unit like the time taken by a unit for processing and reaching inventory because there should not be any scarcity in inventory.
• Inventory management is also supplied with the value of raw materials and their cost in making finished products.
• It also keeps a check-in not increasing the price of a product after adding all taxes. It has to be careful to complete prices right from production cost to packaging cost so that the value per product does not get enhanced.
• Inventory management also notices the presence of raw items that are availed in finishing orders. It is the duty of managers to do the above task to finish in time.
• Inventory management also has the responsibility of keeping the account of raw materials and also makes orders of it at a required time by not disturbing the processing operations.
• Inventory management also keeps a document of finished goods and their shipping. People under this department should be very smart in making calculations as they manage the complete work of products and raw materials.

Also See: Seminar Topics For MBA

The below figure explains about core inventory management process and functions:

Fig1: Core Inventory Management Process and Functions

The relationship between a function of inventory management team and inventory management systems:

The below diagram explains about the functional access of relationship between the function of inventory management and the function of inventory management systems:

fig2: a functional access relationship between function of inventory management and function of inventory management systems

Also See: Materials Management PPT and PDF

Purpose of Inventory Management:

All the organizations have a supply of inventory because of below reasons:

• To maintain independence of operations
• To meet variation in product demand
• To allow flexibility in product scheduling
• To furnish a safeguard for variation in raw material delivery To take benefit of economic purchase order size
• Many other domain-specific reasons

Inventory costs:

In making the decisions which affect the size of inventory, the below costs have to be considered and they are:

• Holding costs or carrying costs
• Setup cost or manufacturing cost
• Cost of ordering
• Shortage costs

Inventory systems:

The below are the inventory systems:

• A single period inventory model
• Multiperiod inventory systems

The single period inventory models are used in following services:

• Overbooking of airline flights
• Ordering of fashion items
• Any type of one-time order

There are two types of multiperiod inventory systems and they are:

• Fixed order quantity model
• Fixed-time period models

Inventory control:

It is a vital parameter for managers to identify the running of products by availing the logic of inventory control. The relation between prices of a sold product, the value of average inventory, and inventory turn.

• Average inventory value * inventory turn = cost of goods sold

Content of the PPT and PDF for Inventory Management Presentation

• Introduction
• Forms of Demand
• Forms of Inventories
• Classification of Inventories Cost
• Inventory Control
• Objectives of Inventory Control

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Inventory Management PPT Free Download

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Inventory Management

Jul 11, 2014

6.22k likes | 12.5k Views

Inventory Management. 12. PowerPoint presentation to accompany Heizer and Render Operations Management, 10e Principles of Operations Management, 8e PowerPoint slides by Jeff Heyl. Outline. The Importance of Inventory Functions of Inventory Types of Inventory Managing Inventory

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• quantity discounts
• optimal order quantity
• inventory items
• independent versus dependent demand
• lecture guide practice problems

Presentation Transcript

Inventory Management 12 PowerPoint presentation to accompany Heizer and Render Operations Management, 10e Principles of Operations Management, 8e PowerPoint slides by Jeff Heyl

Outline • The Importance of Inventory • Functions of Inventory • Types of Inventory • Managing Inventory • ABC Analysis • Record Accuracy • Cycle Counting • Inventory Models • Independent vs. Dependent Demand • Holding, Ordering, and Setup Costs • Inventory Models for Independent Demand • The Basic Economic Order Quantity (EOQ) Model • Minimizing Costs • Reorder Points

Learning Objectives Conduct an ABC analysis Explain and use cycle counting Explain and use the EOQ model for independent inventory demand Compute a reorder point and safety stock

Amazon.com • Amazon.com started as a “virtual” retailer – no inventory, no warehouses, no overhead; just computers taking orders to be filled by others • Growth has forced Amazon.com to become a world leader in warehousing and inventory management

Inventory Management The objective of inventory management is to strike a balance between inventory investment and customer service

Functions of Inventory To decouple or separate various parts of the production process To decouple the firm from fluctuations in demand and provide a stock of goods that will provide a selection for customers To take advantage of quantity discounts To hedge against inflation

Types of Inventory • Raw material • Purchased but not processed • Work-in-process • Undergone some change but not completed • A function of cycle time for a product • Maintenance/repair/operating (MRO) • Necessary to keep machinery and processes productive • Finished goods • Completed product awaiting shipment

ABC Analysis • Divides inventory into three classes based on annual dollar volume • Class A - high annual dollar volume • Class B - medium annual dollar volume • Class C - low annual dollar volume • Used to establish policies that focus on the few critical parts and not the many trivial ones

72% 23% ABC Analysis

5% ABC Analysis

A Items 80 – 70 – 60 – 50 – 40 – 30 – 20 – 10 – 0 – Percent of annual dollar usage B Items C Items | | | | | | | | | | 10 20 30 40 50 60 70 80 90 100 Percent of inventory items ABC Analysis Figure 12.2

Cycle Counting • Items are counted and records updated on a periodic basis • Often used with ABC analysis to determine cycle • Has several advantages • Eliminates shutdowns and interruptions • Eliminates annual inventory adjustment • Trained personnel audit inventory accuracy • Allows causes of errors to be identified and corrected • Maintains accurate inventory records

Independent Versus Dependent Demand • Independent demand - the demand for item is independent of the demand for any other item in inventory • Dependent demand - the demand for item is dependent upon the demand for some other item in the inventory

Holding, Ordering, and Setup Costs • Holding costs - the costs of holding or “carrying” inventory over time • Ordering costs - the costs of placing an order and receiving goods • Setup costs - cost to prepare a machine or process for manufacturing an order

Basic EOQ Model Important assumptions Demand is known, constant, and independent Lead time is known and constant Receipt of inventory is instantaneous and complete Quantity discounts are not possible Only variable costs are setup and holding Stockouts can be completely avoided

Average inventory on hand Q 2 Usage rate Inventory level Minimum inventory 0 Time Inventory Usage Over Time Order quantity = Q (maximum inventory level) Figure 12.3

Total cost of holding and setup (order) Minimum total cost Holding cost Annual cost Setup (or order) cost Order quantity Optimal order quantity (Q*) Minimizing Costs Objective is to minimize total costs Table 12.4(c)

D Q Annual setup cost = S Annual demand Number of units in each order Setup or order cost per order = = (S) D Q The EOQ Model Q = Number of pieces per order Q* = Optimal number of pieces per order (EOQ) D = Annual demand in units for the inventory item S = Setup or ordering cost for each order H = Holding or carrying cost per unit per year Annual setup cost = (Number of orders placed per year) x (Setup or order cost per order)

D Q Annual setup cost = S Annual holding cost = H Order quantity 2 = (Holding cost per unit per year) = (H) Q 2 Q 2 The EOQ Model Q = Number of pieces per order Q* = Optimal number of pieces per order (EOQ) D = Annual demand in units for the inventory item S = Setup or ordering cost for each order H = Holding or carrying cost per unit per year Annual holding cost = (Average inventory level) x (Holding cost per unit per year)

D Q Annual setup cost = S Annual holding cost = H Q 2 D Q S = H 2DS = Q2H Q2 = 2DS/H Q* = 2DS/H Q 2 The EOQ Model Q = Number of pieces per order Q* = Optimal number of pieces per order (EOQ) D = Annual demand in units for the inventory item S = Setup or ordering cost for each order H = Holding or carrying cost per unit per year Optimal order quantity is found when annual setup cost equals annual holding cost Solving for Q*

2DS H Q* = 2(1,000)(10) 0.50 Q* = = 40,000 = 200 units An EOQ Example Determine optimal number of needles to order D = 1,000 units S = $10 per order H = $.50 per unit per year

Expected number of orders Demand Order quantity D Q* = N = = 1,000 200 N = = 5 orders per year An EOQ Example Determine optimal number of needles to order D = 1,000 units Q* = 200 units S = $10 per order H = $.50 per unit per year

Number of working days per year N Expected time between orders = T = 250 5 T = = 50 days between orders An EOQ Example Determine optimal number of needles to order D = 1,000 units Q* = 200 units S = $10 per order N = 5 orders per year H = $.50 per unit per year

Q 2 D Q 200 2 TC = S + H 1,000 200 TC = ($10) + ($.50) An EOQ Example Determine optimal number of needles to order D = 1,000 units Q* = 200 units S = $10 per order N = 5 orders per year H = $.50 per unit per year T = 50 days Total annual cost = Setup cost + Holding cost TC = (5)($10) + (100)($.50) = $50 + $50 = $100

Robust Model • The EOQ model is robust • It works even if all parameters and assumptions are not met • The total cost curve is relatively flat in the area of the EOQ

1,500 units Q 2 D Q 200 2 TC = S + H 1,500 200 TC = ($10) + ($.50) = $75 + $50 = $125 An EOQ Example Management underestimated demand by 50% D = 1,000 units Q* = 200 units S = $10 per order N = 5 orders per year H = $.50 per unit per year T = 50 days Total annual cost increases by only 25%

1,500 units 244.9 2 TC = ($10) + ($.50) Q 2 D Q TC = S + H 1,500 244.9 An EOQ Example Actual EOQ for new demand is 244.9 units D = 1,000 units Q* = 244.9 units S = $10 per order N = 5 orders per year H = $.50 per unit per year T = 50 days Only 2% less than the total cost of $125 when the order quantity was 200 TC = $61.24 + $61.24 = $122.48

Lead time for a new order in days ROP = Demand per day D Number of working days in a year d = Reorder Points • EOQ answers the “how much” question • The reorder point (ROP) tells “when” to order = d x L

Q* Slope = units/day = d Inventory level (units) ROP (units) Time (days) Lead time = L Reorder Point Curve Resupply takes place as order arrives Figure 12.5

D Number of working days in a year d = Reorder Point Example Demand = 8,000 iPods per year 250 working day year Lead time for orders is 3 working days = 8,000/250 = 32 units ROP = d x L = 32 units per day x 3 days = 96 units

Safety Stock • Purpose of Safety Stock • Needed when demand is variable • The level of safety stock is set based on the desired service level • Safety stock is needed to cover uncertainty during the lead-time

In-Class Problems from the Lecture Guide Practice Problems Problem 1: What are the appropriate ABC groups of inventory items?

In-Class Problems from the Lecture Guide Practice Problems Problem 3: Assume you have a product with the following parameters: Demand = 360 Holding cost per year = $1.00 per unit Order cost = $100 per order What is the EOQ? Problem 4: Given the data from Problem 3, and assuming a 300-day work year; how many orders should be processed per year? What is the expected time between orders? Problem 5: What is the total cost for the inventory policy used in Problem 3?

In-Class Problems from the Lecture Guide Practice Problems Problem 7: If demand for an item is 3 units per day, and delivery lead-time is 15 days, what should we use for a re-order point?

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INVENTORY MANAGEMENT PRESENTATION pptx

2020, Inventory Management DE0001

Effective warehouse and inventory management includes proper planning, recording, controlling and monitoring of the inventory. While the planning of transactions (objectives, needs, priorities, budget, procurement, etc.) is performed at the operational level, the execution involves the warehouse. Effective coordination and communication between the Inventory offices and the warehouses are, therefore, essential. Ineffective inventory management could result into incorrect quantities released, incorrect data recorded, poor decisions, excessive inventory levels, inefficient use of funds, damage and losses.

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International Journal of Academic Research in Business and Social Sciences

NUR FARIZAN TARUDIN

Nahason Darko

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The success of a product in today's global marketplace depends on capabilities of firms in the product's supply chain. Among these capabilities, effective inventory management is a capability necessary to lead in the global marketplace. The chapter provides a discussion of four fundamentals of effective inventory management. First, it requires managers to know how best to use available information. Second, managers need to quantify the value of information. Third, they need to coordinate decentralized inventory operations. Finally, effective inventory management requires decision tools that can be embraced by their users. The chapter's emphasis is on the use of information, and the role of new information technologies in inventory management. Previous research on inventory management played an important role in the advancement and development of new technologies and processes. Inventory management and research will continue to play a central role in the success of a product and the firms in its supply chain. The chapter brings together separate but inherently related streams of research in inventory management. By doing so, we highlight potential research opportunities that lie on the boundaries.

Shiau Wei Chan

Effectiveness of inventory management is a vital part in the manufacturing organization to be more competitive. The previous studies have indicated that there are several factors influencing the effectiveness of inventory management in the organization but there is lack of researchers who carried out the research in the manufacturing small medium enterprise in Johor. Therefore, the purpose of this research is to identify the problem of inventory management faced by the manufacturing small medium enterprise and also to determine the factors that will influence the effectiveness of inventory management. In completing this research, 80 employees were selected randomly from the manufacturing small medium enterprise in Batu Pahat, Johor and they were requested to complete questionnaires. The result have shown that the problems of inventory management faced by manufacturing organization were underproduction, overproduction, stock out situation, delays in the delivery of raw materials and discrepancy of records. The factors, documentation/store records, planning, knowledge of employees/staff skill have shown to significantly influence the effectiveness of inventory management while the funds have shown slightly significant influence on the inventory management in manufacturing small medium enterprises. This quantitative study is important to the manufacturing organization in Malaysia because it provides the guidelines to the employers of manufacturing small medium enterprises in Batu Pahat, Johor.

Renz Nico Policarpio

Mehmet TanyaŞ

Inventory are a company's merchandise, raw materials, semi-finished and finished products which have not yet been sold. The derivation of stocking levels throughout the supply chain planning network based upon service level and inventory holding cost inputs. Warehouse is a place in which goods or merchandise are stored. Constructing and fitting out a modern warehouse with all its required equipment and tools require significant capital expenditure. The early warehouse planning and design stage is the key. Mistakes in warehouse capacity planning and layout will decrease warehouse utility and performance while increasing your operational costs. Careful attention should be paid to operational optimization; even a warehouse which operated effectively before may not do so under increasing loads. Special and reserved place(s) for stocks are called “Stock keeping areas”. Therefore fixing these places is very important for warehouse design also for all products which will be stored in. ...

Mostafa Gaber

Dhaalaco Dhalaco

Publishing India Group

Inventory forms the major part of current assets of the business and therefore requires apt strategies for its effective controlling in order to conduct smooth flow of business operations. The paper presents an empirical analysis of inventory control for smooth business operations. The primary data for the study were collected from 44 SSI managers/owners in Udhampur district of J&K state through census technique. BTS and Cronbach-alpha stood as basis for ensuring validity and reliability of the scales in the construct. The purified data after factor analysis were analyzed with the assistance of varied multivariate tools. The results of hierarchal regression model revealed that effective inventory control and management lead to elimination of duplication in ordering, effective inventory control strategies results in reduction of material handling costs, effectual inventory control strategies assists in keeping obsolescence losses to the minimum and effectual inventory control strategies leads to reduction of transportation costs.

SUNDAY A ADEBISI

Inventory can be regarded as a stock of goods. Here, we consider inventory as an idle but usable resource. It includes; labor, raw materials, finished goods and equipment stock is reserved to provide a flow of supply. In addition to design, planning, and inventory control, the applications of queueing theory can also be found in performance evaluation and improvement, logistics and transportation, and other areas of supply chain. The scope of logistics has been considerably extended, as it has been recognized as one of the important tools for developing competitiveness. In this work, efforts are being intensified on harmonizing the logistic technicalities with inventory control.

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