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01technical scroll relevant to cat QualiFication paper 10 Inventory digest is an important part of the working capital vigilance of each judicature. Practical decisions have to be made as to how inventory is going to be managed which management system should be used, how such(prenominal) inventory should be kept and so on. Inventory management is withal an important part of the CAT Paper 10 syllabus. Within ingredient B of the exam, inventory management tail assembly be examined alongside other areas of working capital, or privy be the sole topic of a 20? chump question. It is, in that locationfore, very important that candidates have a good bobby pin of both the written and numerical aspects of this topic. This article allow for focus on the main aspects that could be examined within a Section B question. Why range inventory? Inventory which is non in current use is an idle resource, which is costing the organisation money. at that placefore, an organisation must have good reason to hold it.

There are many reasons a company will hold inventory (and benefits associated with holding inventory) but some of the close to important are: ¤ to meet ongoing demand from the client ¤ to meet an expected rise in demand, eg inventory of trumpery cream in a corner shop may be built up in response to a heat wave being forecast ¤ to ensure toil is not stopped ¤ to qualify for bulk tell discounts/ supererogatory promotions from suppliers ¤ to meet a suppliers requirement for minimum order sizes. There are, however, costs associated with inventory: ¤ holding costs, eg the warehousing, cost of insurance, etc ¤ ordering costs, eg spoken communication costs ¤ shortage costs, eg the loss of sales revenue, the loss of guest goodwill and the cost of paying labour even when there are no raw materials to work with ¤ the purchase price. Factors modify the level oF inventory held In deciding on a level of inventory to be held, the company has to not only(prenominal) weigh up the costs and benefits outlined above, but also consider the... If you want to get a full essay, order it on our website: Orderessay

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