| Inventory control is a day-to-day practice in all fields of | | | | unforeseen variation in service provision. It will equally |
| human endeavour, households, manufacturing firms, | | | | put the firm in a good position to follow the |
| servicing firms etc. The ability to store or stock | | | | market-changing trend of goods and service provision |
| materials for the provision of goods and services is | | | | without recourse to accruing losses brought about by |
| inventory control. It is a sure way of managing | | | | high inventory level of obsolete materials. |
| businesses to ensure that customers are satisfied and | | | | When there is no discipline in planning operations in an |
| organizations remains in operation via minimization of | | | | organisation especially where the capacity is tight, |
| losses. A reliable inventory system implies higher | | | | there is always a problem of high number of expedited |
| confidence of customers and their attendant | | | | orders; stock-outs and customers service failures. This |
| continuous patronage. | | | | uneconomical production trend resulting from poor |
| Inventory in the industry includes production inputs like | | | | master production schedule (MPS) policies borders on |
| human, financial, equipment and raw materials. Other | | | | poor inventory systems which did not embrace |
| forms of inventory are spare parts and partially | | | | material requirement planning (MRP) principles in the |
| finished goods (work in process). Inventory is kept to | | | | formulation of explicit demands from organisations |
| meet independence of operations, variation in product | | | | aggregate planning. When poor data management |
| demand and flexibility in production scheduling, variation | | | | envelops an organisation, operations planning and |
| in raw material delivery time and variation in economic | | | | control system, MPS decisions are found to be |
| purchase order-size | | | | improper and inventory system is affected by the |
| An inventory system provides the organizational | | | | limited flow of information. |
| structure and operating policies for maintaining and | | | | If efficient equipment maintenance operation will be |
| controlling goods to be stocked. An effective | | | | achieved in the industry, the spare parts inventory |
| management of inventory system requires a means | | | | should conform to explicit demand for the service |
| of keeping track of items in inventory and an | | | | provision. This implies that the service level of the firm |
| appropriate way of making decisions about how much | | | | will be duly considered in planning the level of inventory |
| to order and when to order. Decisions about inventory | | | | for maintaining the equipment. The efficiency of a plant |
| in any establishment requires information about | | | | equipment in an industrial setting is a measure of the |
| on-hand inventory level, demand information with | | | | extent of downtime accruing from the component |
| regard to the forecasted quantity (with a consideration | | | | equipment. When downtime accrues on the equipment, |
| of the forecast errors), lead-time and lead-time | | | | the plant obviously malfunctions or breakdown and |
| variation, inventory holding costs, ordering costs and | | | | there is loss of revenue. In order to ensure prompt |
| shortage cost. This information aids the inventory | | | | equipment maintenance and the attendant minimal |
| control manager in meeting the competitive advantage | | | | downtime, critical levels of spare parts should be kept |
| desired by the organization. | | | | in accordance with the maintenance schedule of the |
| In this era of product obsolesce caused by reduced | | | | equipment. This critical stock level is dependent on the |
| product life cycle, inventory system should inevitably | | | | demand rate, which may be a function of the |
| conform to Just-In-Time (JIT) production philosophy to | | | | equipment breakdown or frequency of preventive |
| bring about reduced process lead-time for service | | | | maintenance over a certain period. |
| provision . This situation warrants reduction of the | | | | In order to effectively manage inventory in any |
| work-in -process (W.I.P) inventory level to reduce | | | | business, software will be utilized. This is because the |
| holding cost hence maximizing service quality, utilization | | | | human levity has the tendency of hampering the |
| of product and on-time delivery of goods and service | | | | accuracy of the inventory controlled manually thereby |
| to designated customers. The inventory system is | | | | affecting the business performance. When software is |
| always conscious of meeting target at minimum W.I.P | | | | used in managing a business inventory flow, the |
| inventory level. | | | | entrepreneur will be in a position to predict with a high |
| Good inventory control system always guards against | | | | degree of certainty the expected income over a time |
| stock-out, which results in an increase W.I.P inventory | | | | frame. This is because most of the software has the |
| cost that affects the production process negatively. | | | | ability to cost inventory inflow and outflow thereby |
| Better demand management through appropriate | | | | making it easy to make categorical statement about |
| forecast of stock usage helps to maintain an optimal | | | | the business profitability. |
| stock that will achieve a desirable cover against | | | | |