Explain Benefits or Importance of Inventory Control
Following ikon briefly explains benefits or importance of blogspot.com//search?q=what-is-inventory-control-definition">inventory control.
blogspot.com//search?q=what-is-inventory-control-definition">demand of its products.
The next tidings briefly in addition to lucidly covers all the above-mentioned objectives, benefits or importance of inventory control.
1. Protects from fluctuations inward demand
Many a times, the need forecast of a production is non accurate. There is ever a small-scale departure betwixt the need forecast in addition to actual demand. However, sometimes, at that spot is a big departure betwixt the need forecast in addition to actual-demand.
So, at that spot are ever chances of fluctuations inward the need of a material. These fluctuations tin live on adjusted if at that spot are sufficient items inward the stock of blogspot.com//search?q=what-is-inventory-control-definition">inventory. Therefore, proper inventory command protects the society from fluctuations inward demand.
2. Better services to customers
If the society maintains a proper inventory of raw-materials, therefore it tin consummate its production inward time. So, it tin deliver the finished goods to the customers inward time.
Similarly, if the society has a proper inventory of finished goods, therefore it tin satisfy the additional need of the customers. So, inventory command helps the society to deliver goods at the correct fourth dimension every bit demanded past times the customers.
After making timely delivery, the society tin concentrate on giving other services to the customers.
3. Continuity of production operations
Proper inventory command helps to maintain continuity of production operations. This is because it maintains a shine menstruation of raw materials. So, at that spot are no shortages of raw-materials required for production process.
4. Reduces the hazard of loss
Proper inventory command helps to bring down the hazard of loss due to obsolescence (outdated) or deterioration of items. This is because it checks all the items regularly.
Furthermore, it sells all the slow-moving items, inward time, at the marketplace position prices. It entirely maintains the correct stock at all times. So, the chances of whatsoever particular getting outdated is reduced.
5. Minimizes the administrative workload
Proper inventory command helps to minimize the administrative travel charge of purchasing, inspection, warehousing, etc. This volition bring down the manpower requirement in addition to volition minimize the labour cost too.
6. Protects fluctuation inward output
Inventory command tries to bring down the gap betwixt planned production in addition to actual production. There are cases where the production schedule cannot live on followed because of:
- Sudden breakdown of machines,
- Problems inward provide of materials,
- Sudden labour strikes,
- Loss due to failure of ability supply, etc.
In such cases, the departure betwixt planned production in addition to actual production tin live on bridged past times inventories held inward stock.
7. Effective role of working capital
Proper inventory command helps to brand effective role of working capital. Inventory command helps inward maintaining the correct amount of stocks of materials, components, etc. Over stocking is avoided. Therefore, the working majuscule volition non live on blocked inward excess inventory.
8. Check on loss of materials
Inventory command helps to maintain a cheque on the loss of materials due to carelessness or pilferage (stealing).
If at that spot is no proper inventory control, therefore at that spot are to a greater extent than chances of carelessness in addition to pilferage past times the employees, peculiarly inward the store-keeping department.
9. Facilitates cost accounting activities
Inventory command facilitates cost accounting activities. This is because, inventory command provides a agency of allocating materials cost of products, departments or other operating accounts.
10. Avoids duplication inward ordering
Inventory command avoids duplication inward ordering of stock. This is done past times maintaining a split upward buy department. This subdivision volition practise all the purchasing for the total blogspot.com//search?q=what-is-inventory-control-definition">organisation. No other subdivision is allowed to practise purchasing. So at that spot volition non live on whatsoever duplication inward ordering of stock.
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