Explain Benefits Or Importance Of Inventory Control

Explain Benefits or Importance of Inventory Control

Following icon 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.

It enables a fellowship to provide ameliorate services to its customers.

It keeps a smoothen period of time of raw-materials as well as aids inwards continuing blogspot.com//search?q=what-is-inventory-control-definition">production operations.

It checks as well as maintains the correct stock as well as reduces the peril of loss.

It helps to minimise administrative workload, manpower requirement as well as fifty-fifty blogspot.com//search?q=what-is-inventory-control-definition">labour cost.

It tries to protect fluctuation inwards output.

It makes effective purpose of working blogspot.com//search?q=what-is-inventory-control-definition">capital yesteryear avoiding over-stocking.

It helps to maintain a banking enterprise check on loss of materials due to carelessness or pilferage (stealing).

It facilitates cost accounting activities.

It avoids duplication inwards ordering of stock.

The next give-and-take briefly as well as lucidly covers all the above-mentioned objectives, benefits or importance of inventory control.

1. Protects from fluctuations inwards demand

Many a times, the need forecast of a production is non accurate. There is ever a small-scale 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 inwards the need of a material. These fluctuations tin hold out adjusted if at that topographic point are sufficient items inwards the stock of blogspot.com//search?q=what-is-inventory-control-definition">inventory. Therefore, proper inventory command protects the fellowship from fluctuations inwards demand.

2. Better services to customers

If the fellowship maintains a proper inventory of raw-materials, as well as then it tin consummate its production inwards time. So, it tin deliver the finished goods to the customers inwards time.

Similarly, if the fellowship has a proper inventory of finished goods, as well as then it tin satisfy the additional need of the customers. So, inventory command helps the fellowship to deliver goods at the correct fourth dimension every bit demanded yesteryear the customers.

After making timely delivery, the fellowship 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 smoothen period of time 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 trim 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, inwards time, at the marketplace prices. It exclusively maintains the correct stock at all times. So, the chances of whatever particular getting outdated is reduced.

5. Minimizes the administrative workload

Proper inventory command helps to minimize the administrative move charge of purchasing, inspection, warehousing, etc. This volition trim down the manpower requirement as well as volition minimize the labour cost too.

6. Protects fluctuation inwards output

Inventory command tries to trim down the gap betwixt planned production as well as actual production. There are cases where the production schedule cannot hold out followed because of:

Sudden breakdown of machines,
Problems inwards render 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 hold out bridged yesteryear inventories held inwards stock.

7. Effective purpose of working capital

Proper inventory command helps to brand effective purpose of working capital. Inventory command helps inwards maintaining the correct amount of stocks of materials, components, etc. Over stocking is avoided. Therefore, the working upper-case missive of the alphabet volition non hold out blocked inwards excess inventory.

8. Check on loss of materials

Inventory command helps to maintain a banking enterprise check on the loss of materials due to carelessness or pilferage (stealing).

If at that topographic point is no proper inventory control, as well as then at that topographic point are to a greater extent than chances of carelessness as well as pilferage yesteryear the employees, peculiarly inwards 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 inwards ordering

Inventory command avoids duplication inwards ordering of stock. This is done yesteryear maintaining a dissever 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 topographic point volition non hold out whatever duplication inwards ordering of stock.

Explain Benefits Or Importance Of Inventory Control