– Inventory Management
All organizations have some level of inventory which must be properly administered because they represent capital. High operational costs provide strong motivation for discerning organizations to have greater inventory management control. Various organizations have employed the basic inventory management techniques or inventory control methods to keep their inventory costs in check. This section we will review the most of techniques used in inventory management.
1- Economic order quantity (EOQ)
The EOQ models are based on a continuous-review policy and they assume that the inventory can be monitored every moment in time. In practice this is implemented by a procedure to monitor the inventory each time a change occurs. Then, if the inventory has reached a threshold, the replenishment decision will occur. the inventory management needs to be organized in a logical way so that the organization can be able to know when to order and how much to order. This must be attained through calculating the Economic order quantity.
2- Just in time technique
Just – In – Time inventory is generally regarded as an efficient inventory management system. The JIT concept of production was introduced in Japan under the name of Kanban. concept material and components are supplied to the work station just at the time they are required for use . The main purpose of using this method is to avoid waste overproduction, waiting, excess inventory, total quality control and devotion to the customer. characterizes JIT as a process that is prepared for moment response to the request without the necessity for any overstocking, either in the desire of the application being approaching or as a concern of improvident characteristics all the while.
Is a supply-chain initiative where the supplier is authorized to manage inventories of agreed-upon stock-keeping units at retail locations. a VMI supplier has the liberty of controlling the downstream resupply decisions rather than filling orders as they are placed. Thus, the approach offers a framework for synchronizing inventory and transportation decisions. And identifies that upstream information exchanged to suppliers such as the current stock level and precise deals conjecture is the most vital element for the effective usage of Vendor Management Inventory.
4- ABC analysis
ABC analysis is the most popular technique used in Inventory Management, base on classify item into 3 types from A: (very important items), B: (moderately important items) and C: (relatively unimportant items), they talked about problem of these type of classifying problem in ranking.