TYPES OF INVENTORIES
Inventories are of three types:
1. Finished goods inventory
2. Working-process inventory
3. Raw materials inventory
Finished goods inventories are maintained by manufacturers, wholesalers and retailers. On the other hand, work in process and raw materials inventories are maintained only by manufacturers.
Finished goods inventory exists even if the demand for goods is fixed or known. The reasons are the same as given under the heading ‘disadvantages of under-stocking’. Inventories are maintained even by those manufacturers who make to order. It is so because they have still to maintain a raw material inventory.
1. Define inventory. Also write a note on inventory control.
2. Explain buying for business. Also discuss its steps.
3. Briefly describe buying decisions.
4. Discuss the carry costs of merchandise inventory.
5. State the disadvantages of overstocking and under-stocking.
6. Explain reorder costs.
7. What are the objectives of inventory? Elucidate.
8. Write notes on the following:
b. Handling cost
c. Maintaining cost
d. Safety stock
e. Large scale economics