The purpose of the project was to find out effective means of Inventory management followed this path with focused strategies for improving corporate minimize the cost of inventories,minimize the holding days of inventories, and the maintain the flow of production. The project involved discussing the drivers of superior inventory management performance because it is a barometer for the underlying business behavior. The objective was to better assess the true potential of the company and its ability to achieve sustainable results from this potential.
Inventories constitute the principal items in the working capital of the majority of trading and industrial companies. In inventory, we include raw material, finish good, working in progress,supplies and other accessories. To maintain the continuity in the operations of business enterprise, a minimum stock of inventory is required. Management of inventory is designed to regulate the volume of investment in goods on hands, the types of goods carried in stock to meet the needs of production and sales while at the time, the investment in them is to kept at a reasonable level.
Concept of Inventory Management
The term inventory management is used in two ways unit control and value control. Production and purchase officials use this word in term unit control whereas in accounting this word is used in term of value control. As investment in inventory represents in many cases, one of the largest assets items of business enterprise particularly those engage in manufacturing, whole sale trade and retail trade. Sometime the cost of material used in production surpasses the wages and production overhead.