An Inventory is a Stock or Store of goods kept to meet customers expected demand.
Inventory can also be defined as the stored accumulation of transformed resources in a process, and it usually applies to material resources but may also be used for inventories of information.
Almost all operations keep some kind of inventory, most usually of materials but also of information and customers (Customers inventories are normally called Queues).
These inventories can take various forms, which includes raw materials purchased but not processed, work- in- process (WIP) incomplete products or components nor longer considered raw materials., maintenance, ...view middle of the document...
Flame Electrical respond quickly to their customers needs and they have been viewed positively by customers. Speed has also helped to reduce costs because inventories and associated risks have been reduced.
Means being on time. Customers expect to receive their goods on time. The stock levels help them to be dependable because the customers must find what they want when they want them and the in the right quantities. Dependability helps to increase the chances of customers returning with more business. By saving time, Flame will save money, have stability and improve on efficiency. Flame’s highly dependable system has helped to increase speed at which they serve their customers. It will not be possible for Flame to promise their customers fast response if their operation (internal) is not dependable.
This will always mean, “The abilility to change the operation in some way”. While there are different types of flexibility, (Product/service flexibility, Volume flexibility, and Delivery flexibility), Delivery flexibility has allowed Flame to adjust their delivery procedures to cope with unexpected changes in demand.
In emergency cases they even use fast courier services to bring in those lamps which are urgently required, resulting in customer satisfaction. Flexibility has helped Flame Electrical to speed up response, save time (therefore money) and maintained their dependability.
Cost structures of different organizations vary. There are three basic costs associated with inventory. These are;
i) Holding costs e.g. ...