INVENTORY TECHNIQUES

INVENTORY TECHNIQUES

1. Just in time

   • The Just In Time (JIT) method works to lessen the volume of inventory that a business has on hand. It is considered a risky technique because you only purchase inventory a few days before it is needed for distribution or sale so that the items arrive just in time for use. JIT helps organisations save on inventory holding costs by keeping stock levels low, and eliminates situations where deadstock sit on shelves for months on end. You need to conduct thorough research into customer buying habits, seasonal demand, and source for reliable suppliers and channels of transportation before implementing JIT into your business operations to minimise risks and screw ups.

2. Maximum minimum

   • A min/max inventory system is an approach to managing materials or goods in which the business sets a minimum threshold and a maximum level of inventory to hold. When the current supply of an item reaches the minimum level, a new order is placed. When new materials or goods are ordered, the total supply on hand cannot exceed the maximum amount.

3. Material Requirement Planning (MRP)

   • Material Requirements Planning is a production planning, scheduling and inventory control system used to manage manufacturing processes. Most MRP system are software-based, but it is possible to conduct MRP by hand as well.

4. Fixed-Quantity system

   • Inventory control system in which the quantity or amount of every item is monitored continuously, and whenever it falls below a certain level, an order to replenish it to the required level is placed. The Fixed Order Quantity system is followed by many firms since it helps to reduce the reorder mistakes, manage the storage capacity efficiently and prevent the unnecessary blockage of funds, which can be used elsewhere.

5. Fixed-Quantity System (Trans, 5-2)

   • Inventory control system where stock level is reviewed regularly at fixed intervals (not continuously), and whenever it falls below a certain level, an order to replenish it to the required level is placed. Stock level: the quantity or number of goods or raw materials kept on the premises of a shop or business (nivel de existencias)

6. ORDER POINT PLANNING (OPP)

   • Predicting an optimal amount of stock for varying costumer demands is a critical component in balancing an operation’s inventory system. Your inventory system should act as a reserve of products to meet your sales needs, while minimizing the amount of cash you have tied up in inventory.

7. UEPS AND PEPS

   • PEPS: Este método presenta el inventario final a su costo más actual. Cuando aumentan los costos de inventario (aumento de precios) este método da como resultado una utilidad más alta y por tanto un impuesto sobre la venta mayor. Los primeros costos que entraron al inventario son los primeros costos que salen al costo de las mercancías vendidas.
   • UEPS:Este método presenta el costo de las mercancías vendidas a un costo más actual. Cuando aumentan los costos de los inventarios este método produce el costo de mercancías vendidas más alto y la utilidad más baja, minimizando el impuesto sobre la venta. Los últimos costos que entran al inventario son los primeros costos que salen al costo de las mercancías vendidas