Inventory control is the means by which materials of the
correct quality and in correct quantity are made available as and when required
with due regard to economy in storage and ordering costs, purchase prices and
working capitals. In other words it is the technique of maintaining the size of
the inventory at some desired level keeping in mind the best economic interests
of the production system. The desired level can neither be much high nor much
low because high level of inventory will lead to increase in carrying cost
while low level of inventory will lead to increase in ordering cost.
According to L . V Fine, the planning and scheduling of
materials in the manufacturing process. It is possible to exercise control over
the three types of inventories recognized by the accountant as raw materials
work in progress and finished goods.
According to john L. Burbidge “Inventory control is then
concerned with the control of the quantities and or monetary values of these
items a predetermined level or with safe limits".
Inventory control is the techniques of maintaining stock
keeping items at the desired level whether they are raw materials, goods in
process or finished products. Inventory control keeps track of inventory. The
balance between high level and low level can be done by means of effective
inventory control.
Thus the inventory control management includes the
followings aspects:
a. Size of inventory: Determining maximum and minimum levels
establishing time schedules procedures and lot of sizes for new orders
ascertaining minimum safety levels coordinating sales production and inventory
policies.
b. Providing proper storage facilities arranging the receipt
disbursements and procurement of materials developing the forms of recording
these transactions.
c. Assigning responsibilities for carrying out inventory
control functions.
d. Providing for the reports necessary for supervising the
overall activity.
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