Why is inventory control important to us today and in the future?

Discussion 1

Why is inventory control important to us today and in the future?

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I think inventory control is important to all aspects of businesses, in the public and private sector, in this day an age of “I want it now” and the competitiveness of like businesses,  a company cannot afford to turn a customer away because you don’t know what you have in your inventory and come to find out you had the product all along.  So as a business owner and having control helps with a few hurdles like avoiding stockouts, this refers to the “want it now” concept, either you know you have the product or you don’t but disappointing the customer is not what a business wants.  Overstocking, without proper control inventory, can be left on a shelf and one of two things can happen, the item does not sell and/or the business is losing money because the item is not selling.  Overstocking creates working capital issues.  However, in true supply chain fashion, when dealing with the phases of a product the manufacturer would be the one that would suffer the most if inventory is not controlled properly or efficiently.  This could cause a shut down of a particular product, especially in the raw materials department.  If materials run out because of failed control then money is lost in the long run.

Merritt, C. (n.d.). Why Is Inventory Control Important? Retrieved from http://smallbusiness.chron.com/inventory-control-important-74237.html (Links to an external site.)Links to an external site.

Inventory control is essential in the supply chain management and to us for many reasons. Having logistical control on inventory has a substantial effect on the bottom line of a company’s capital. Depending on the category, inventory’s value fluctuates. For example, in the electronics category, the price of an item can decrease on a daily basis. However, if a business sells antique items, the outcome may be the opposite. Therefore, the inventory holding costs become one of the factors in the need to maintain safety stock and the quantity of each stock keeping unit. The cost of inventory has several direct and indirect costs associated with it. “Some of these costs include storage, distribution, transportation as well as the reverse logistics costs. These costs significantly affect current inventory that is tied up and future purchases of inventory” (Cox, 2011).

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