Judging the inventory system carries a lot of importance in the area of inventory management. The principal goal of inventory management is to lower the expenses of a company at a degree of risk, which is satisfactory to the management.
The most important criteria for judging the inventory system are the following:
According to this aspect, the questions that are frequently faced by the entrepreneurs are the following:
Is the infrastructure amenable to alterations or modifications?
Is the infrastructure able to manage new circumstances, new products, and new necessities? A particular level of adaptability and flexibleness has to be configured into the infrastructure for making the infrastructure diversified.
Naturally, this is not or should not be conducted for an extensive period. The infrastructure cannot offer solutions for each probable and conceivable eventuality.
The inventory management methods vary in nature and can be absolutely easy or quite complicated. Whether the method is difficult or easy and regardless of the method being manual or automatized, it has to be distinctly comprehensible to every party that is involved. The method should be decently defined to everyone related to the method. The principal objective behind this is to make the intention, reasonableness, and principle clear. This renders motivation for the method and increases its trustworthiness.
Inventories can sustain losses in terms of value as a result of a number of elements. The most fundamental origins of value diminution are the following:
Degeneration induced by modifications in science and technology and changes in customer preference
Material wear and tear over the passing of time
Variations in price due to underlying unpredictability of particular goods
The inventory management methods should have the capacity to bring on well-timed activities. It also has to offer sufficient premonition that propels suitable restorative initiatives for the system.
Last Updated on : 27th June 2013