Manufacturing Technology: Theory and Problems, Second Edition

CHAPTER 15

Elements of Modern Manufacturing

INVENTORY AND INVENTORY CONTROL

• An inventory is defined as stock of goods, may be in the form of raw materials or finished goods.
• Inventories are considered as a buffer against uncertain supplies. But at the same time, lower inventory levels save financing and storage costs.
• The concept of zero inventories is very appealing but this approach is not practically feasible.
• Inventory problems involve finding the optimum level of inventory to avoid shortage or surplus situation.
• Quality of inventory is important because defective inventories involve extra purchasing and carrying costs.
• Unit cost of inventory is the cost to procure its unit quantity. This cost is independent of quantity of inventory produced. ...