Inventory Case Study

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Company Name: Ama Greenfield Breweries plc.
Inventory is one of the resources that are managed by business organizations and it was first recorded in 1601. The need for inventory control cannot be overemphasized as it is a means for improving the performance of manufacturing industries. Inventory can be defined as a record of a business current assets including property owned, merchandise on hand and the value of work in progress and work complete but not sold and it is classified as a current asset because it can be turned into liquid cash within a short period of time. Inventory has created a great impact on the profitability of the manufacturing firm which resulted to the deep research of this topic.

Effectiveness of inventory management …show more content…

In manufacturing, inventories of raw materials allow companies to operate independently of their sources of supplies. Day to day operations are not dependent on deliveries from supplies since stock of the necessary materials are maintained and used s needed. Without inventory control, millions of naira could be lost year because of non accountability of stocks and inaccurate checks and balances. The process of control and management of inventory is a very important factor in the success or failure of any business. For example, little stock will result in stock out which will disrupt the production distribution cycle that is crucial to the survival of all manufacturing companies while too much stock will tie down the resources of a company. Poor or inadequate inventory management can present a serious challenge to the productive capacity of a manufacturing organization. In addition to raw materials and finished goods, many companies also maintain items of assets, property, inventories of work in progress, office supplies, business firms and general operation …show more content…

Stocking excessive amounts of finished wood products such as lumber, plywood, veneer, OSB, MDF, I-joists, or furniture reduces profit because storage costs for these inventory goods are significantly more than the cost of raw materials or WIP inefficiencies due to greater costs already absorbed. The purchase price of raw materials is not the only cost to consider when planning inventory. In addition to the purchase price, there is also the cost of setting up an order and the cost of holding or maintaining

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