Importance Of Inventory Management

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Introduction of the study 1.1 NEED FOR THE STUDY Inventory management being a very important concept in all the company’s having a void coverage often calls for the managerial attention. In the modern times inventory management has becomes the integral part of the all companies. So all the firm gives special importance for inventory management. Inventories are equivalent to cash and they make up an important of the total cost. It is essential that inventory should be properly safeguarded and correctly accounted. Proper control of inventories can make a substantial contribution to the efficiency of a business. The success of a business concern largely depends upon efficient purchasing, storage, consumption and accounting. So it is very necessary…show more content…
 Ensuring a continuous supply of material to production department facilitating uninterrupted production  Maintaining sufficient stock of raw material in period of short supply  Maintaining sufficient stock of finished goods for smooth sales operation  Minimizing the carrying cost  Keeping investment in inventories at the optimum level As GMM carries large no. inventory, it is very much important to follow inventory management technique strictly and thereby avoiding excess investment in inventory and uninterrupted production. 1.4 RESEARCH METHODOLOGY 1.4.1 Research design. A research design is a framework to prepare plan or study. It is useful as a guide to collect the data and analysing it. It is a blue print that is followed I completing the study. Research design is the conceptual structure within which the research will be conduct. 1.4.2 Types of research: The study exploratory in nature. 1.4.3 Data collection: Methodology is a systematic procedure of collecting information in order to analyse and verify a phenomenon. The collection is done through two principle sources viz.  Primary data  Secondary…show more content…
2. Material Requirement Planning (MRP) Material requirement planning is a production planning, scheduling, and inventory control system used to manage manufacturing process. It is maintain the lowest possible material and product level in store. Most MRP systems are software based, while it is possible to conduct MRP by hand as well. The basic function of MRP system include inventory control, bill of material processing, and elementary scheduling. MRP helps organizations to maintain low inventory levels. It is used to plan manufacturing, purchasing, and delivering activities. The MRP method included two types of demand.  Dependent demand  Independent demand Independent demand is demand originating outside the plant or production system while dependent demand is demand for components. The basic function of MRP system include inventory control, bill of material processing, and elementary scheduling. Companies needs to control the types and quantities of material they purchase, plan which product are to be produced and in what quantities and ensure they are able to meet current and future customer demand, all at the lowest possible cost. Making bad decision in any of these area will make the company lose
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