Explain Benefits or Importance of Inventory Control
Following ikon briefly explains benefits or importance of inventory control.
demand of its products.
The next news briefly as well as 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 modest deviation betwixt the need forecast as well as actual demand. However, sometimes, at that topographic point is a big deviation betwixt the need forecast as well as actual-demand.
So, at that topographic point are ever chances of fluctuations inward the need of a material. These fluctuations tin move adjusted if at that topographic point are sufficient items inward the stock of inventory. Therefore, proper inventory command protects the companionship from fluctuations inward demand.
2. Better services to customers
If the companionship maintains a proper inventory of raw-materials, as well as therefore it tin consummate its production inward time. So, it tin deliver the finished goods to the customers inward time.
Similarly, if the companionship has a proper inventory of finished goods, as well as therefore it tin satisfy the additional need of the customers. So, inventory command helps the companionship to deliver goods at the correct fourth dimension every bit demanded yesteryear the customers.
After making timely delivery, the companionship tin concentrate on giving other services to the customers.
3. Continuity of production operations
Advertiser
Proper inventory command helps to maintain continuity of production operations. This is because it maintains a shine menstruum of raw materials. So, at that topographic point are no shortages of raw-materials required for production process.
4. Reduces the peril of loss
Proper inventory command helps to cut down the peril of loss due to obsolescence (outdated) or deterioration of items.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 prices. It alone maintains the correct stock at all times. So, the chances of whatever detail getting outdated is reduced.
5. Minimizes the administrative workload
Proper inventory command helps to minimize the administrative operate charge of purchasing, inspection, warehousing, etc. This volition cut down the manpower requirement as well as volition minimize the labour cost too.
6. Protects fluctuation inward output
Inventory command tries to cut down the gap betwixt planned production as well as actual production. There are cases where the production schedule cannot move 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 deviation betwixt planned production as well as actual production tin move bridged yesteryear inventories held inward stock.
7. Effective purpose of working capital
Proper inventory command helps to brand effective purpose 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 move 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 topographic point is no proper inventory control, as well as therefore at that topographic point are to a greater extent than chances of carelessness as well as pilferage yesteryear the employees, particularly inward the store-keeping department.
9. Facilitates cost accounting activities
Inventory command facilitates cost accounting activities. This is because, inventory command provides a way 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 yesteryear maintaining a carve upwardly buy department. This subdivision volition exercise all the purchasing for the total organisation. No other subdivision is allowed to exercise purchasing. So at that topographic point volition non move whatever duplication inward ordering of stock.