INVENTORY

. A company's merchandise, raw materials, and finished and

unfinished products which have not yet been sold. These are
considered liquid assets, since they can be converted into cash quite easily.
There are various means of valuing these assets, but to be conservative the
lowest value is usually used in financial statements.

What is "Inventory Management"
Inventory management is the active control program which allows the
management of sales, purchases and payments.

Inventory management software helps create invoices, purchase orders,
receiving lists, payment receipts and can print bar coded labels. An
inventory management software system configured to your warehouse,
retail or product line will help to create revenue for your company. The
Inventory Management will control operating costs and provide better
understanding. A complete Inventory Management Control system contains
the following components:
O Inventory Management Definition
O Inventory Management Terms
O Inventory Management Purposes
O Definition and Objectives for Inventory Management
O Organizational Hierarchy of Inventory Management
O Inventory Management Planning
O Inventory Management Controls for Inventory
O Determining Inventory Management Stock Levels

Reasons for Keeping Inventories
. To stabilize production: The demand for an item fluctuates because of
the number of factors seasonality, production schedule etc. The
inventories (raw materials and Components)should be made available to the
production as per the demand failing which results in stock outand the
production stoppage takes place for want of materials. Hence, the inventory
is kept to take care of this fluctuation so that the production is smooth.

2. To take advantage of price discounts: Usually the manufacturers offer
discount for bulk buying and to gain this price advantage the materials are
bought in bulk even though it is not required immediately. Thus, inventory is
maintained to gain economy in purchasing.
. To meet the demand during the replenishment period: The lead
time for procurement of materials depends upon many factors like location
of the source, demand supply condition, etc.
So inventory is maintained to meet the demand during the procurement
(replenishment) period.
4. To prevent loss of orders (sales): In this competitive scenario, one
has to meet the delivery schedules at per cent service level, means they
cannot afford to miss the delivery schedule which may result in loss of sales.
To avoid the organizations have to maintain inventory.
5. To keep pace with changing market conditions: The organizations
have to anticipate the changing market sentiments and they have to stock
materials in anticipation of non-Availability of materials or sudden increase
in prices.
6. Sometimes the organizations have to stock materials due to other reasons
like suppliers
minimum quantity condition, seasonal availability of materials or sudden
increase in prices.

Meaning of Inventory Control
Inventory control is a planned approach of determining what to order, when
to order and how much to order and how much to stock so that costs
associated with buying and storing are optimal without
interrupting production and sales.
Inventory control basically deals with two problems:
hen should an order be placed? (Order level)
How much should be ordered? (Order quantity).


Transactions in inventory:
OVERVIEW OF INVENTORY TRANSACTIONS
. Transferring material between subinventories.
2. Performing miscellaneous transactions (miscellaneous issues and
receipts).
. Transferring material between Organizations.
4. Tracking lots and serial numbers for an item (Assigning Lot Numbers,
Assigning Serial Numbers).
5. Generating material shortage alerts and material shortage notifications.
6. Entering and maintaining movement statistics information.
7. Viewing Material Transactions.
8. Viewing material transaction accounting distributions.
9. Viewing Transaction Summaries for a range of dates.
. Viewing Pending Transactions.
. Viewing and Updating pending Transaction Interface Activity.
2. Purging Transaction History.
. Viewing Serial Genealogy.


Subinventories are unique physical or logical separations oI material inventory,
such as raw inventory, Iinished goods, or deIective material. All material within an
organization is held in a subinventory thereIore, you must deIine at least one
subinventory.
1Sub|nventory transfer
5obloveototy ttoosfet LransacLlon ls used Lo Lo Lransfer lnvenLory from one
sublnvenLory Lo oLher sublnvenLory
Interorgan|zat|ona| transfer
ou can deflne mulLlple lnvenLorles warehouses and manufacLurlng faclllLles as
dlsLlncL organlzaLlons WlLh Cracle lnvenLory you can perform lnLerorganlzaLlon
Lransfers as dlrecL or lnLranslL shlpmenLs
ou can Lransfer one or more lLems ln a slngle LransacLlon ou can also Lransfer
parLlal quanLlLles of Lhe same lLem Lo dlfferenL sublnvenLorles and locaLors ln a
slngle LransacLlon 1he lLems you Lransfer musL exlsL ln boLh organlzaLlons ou
can also Lransfer expense and asseL lLems from one organlzaLlon Lo anoLher uslng
lnLranslL lnvenLory
3Movement stat|st|cs
MovemenL sLaLlsLlcs ls a sysLem for collecLlng and recordlng Lhe movemenL of maLerlal across
lnLernaLlonal borders under Lhe dlrecLlon of governmenL leglslaLlon
MaLerlal D|str|but|on
Materials Distribution is responsible for maintaining an inventory of high-
use like or similar items utilized by University departments.
Cons|gned |nventory
Consignment Inventory is inventory that is in the possession of the customer,
but is stiII owned by the suppIier.
n other words, the supplier places some of his inventory in his customer's possession
(in their store or warehouse) and allows them to sell or consume directly from his stock.
The customer purchases the inventory only after he has resold or consumed it.

6.iscellaneous Transactions
ou can use the Miscellaneous Transaction window to issue itemsIrom a
subinventory to a general ledger account (or account alias) and to receive items
into a subinventory Irom an account / account alias.
#ecording Borrow/Payback Transactions
Borrow/Payback lets you transfer material between projects within your current
organization. Borrow/Payback transactions apply to temporary projecttoproject
transfers.
Planning Transfer Transaction
!lanning transIers enables you to assume the planning responsibility Irom the supplier. This
transaction does not move goods, it changes the planning organization Irom the supplier site to
the internal organization that holds the goods.
'iewing Transaction Summaries
ou can view transaction summaries Ior items transacted within a speciIied date range. ou can
use search criteria to Iurther narrow the Iocus oI the inIormation summarized. ou can use this
inIormation Ior input/output and transaction history analysis.
10Purging Transaction History
ou can purge all transaction history and associated accounting information for your
current organization, where the transaction date is before and including the purge date
you enter and is in a closed period.

#eceiving Transactions
ou can receive all or a partial list of open lines on any purchase order by using the Receipts
window. ou can also receive substitute items and goods or services you have not ordered.

Types:
1. Receipt
2. Returns
3. Corrections
4. Nanage Shipments
S. Transaction Status summary