The advantages and disadvantages of inventories

Scheduling, production control and inventory management are more difficult and costlier when stocks are kept at optimum level.

disadvantages of low inventory levels

This includes materials actually being worked on or moving between work centers or being in transit to distribution centre and customers. Seasonal demand: When the demand is seasonal, it may become economical to build inventory during periods of low demand to ease the strain of peak period demand 7.

Learning how to operate the system can be lengthy, cumbersome as well as complex. Proper groups can be formed of the products which are sold together or the ones for which the demand is high, they can be stored in large quantities as compared to the ones for which the demand is low.

When you have excess inventory, you don't run the risk of being the business that ran out of stock when everyone was looking for one particular product. Through the software it is ensured that there is no under stocking so that the production procedure does not get hampered due to lack of inventory.

advantages of stock control

After considering the pros and cons of the inventory management system, it is always advisable to install the software in the organization as it finally leads to many benefits. This inventory management system or software is generally used by many companies and it helps in avoiding overstock and shortage of inventories.

Adequate Stocks: The system helps in maintaining adequate stocks which in turn facilitates timely and regular supply of the inventory. The lower costs could be significant depending on the price points of the product.

When you carry high inventory, you also have greater exposure to lost or damaged product.

Rated 5/10 based on 6 review
Download
The Disadvantages of Inventory Control