INVENTORY AND WAREHOUSING PL201 FUNDAMENTAL OF LOGISTICS MANAGEMENT

1. INVENTORY AND WAREHOUSING PL201FUNDAMENTAL OF LOGISTICS MANAGEMENT

2. DEFINE THE CONCEPT OF INVENTORY MANAGEMENT IN SUPPLY CHAIN AND LOGISTICS ACTIVITIES • Inventory refers to the stockpile of the products a firm would sell in future in the normal course of business operations and the components that make up the product. • The firm stores three types of inventories, namely, raw materials, work-in-process/ semi-finished goods and finished good.

3. TYPES OF INVENTORY DEMAND

4. TYPES OF INVENTORY DEMAND

5. THE PURPOSE IN INVENTORY

6. THE PURPOSE IN INVENTORY

7. OBJECTIVES OF INVENTORY MANAGEMENT The objectives of inventory management consists of two counterbalancing parts: • to minimize investments in inventory and to meet the demand for products by efficiently organizing the production and sales operations. • In operational terms, the goal of inventory management is to have a trade-off between these two conflicting objectives which can be expressed in terms of costs and benefits associated with different levels of inventory.

8. THE IMPORTANCE OF WAREHOUSE STORAGE • Trade - Without warehouse facilities it would be very difficult to ship goods produced in Washington, such as agricultural commodities, lumber and wood products, and aluminum, out of the state. Warehouses are also essential to importers. • Storage/Distribution of Goods - Warehouses are utilized by retailers and wholesalers for the goods that they buy and sell. Manufacturers use warehouses to store raw materials and finished products. • Expansion of Markets - By locating warehouse facilities in different parts of the state, firms can expand beyond their own local markets. • Small Firms - The use of warehouse facilities gives small firms the opportunity to grow without large capital investments and one warehouse can service many small firms

9. BASIC REASONS FOR WAREHOUSE STORAGE REQUIREMENTS

10. WAREHOUSE ACTIVITES • Receive goods – the warehouse accepts goods from outside transportation or an attached factory and accepts responsibility for them. This means that the warehouse must check goods against an order and the bill of lading, check the quantities, check for damage and fill out damage report if necessary and inspect goods if required. • Identify the goods- items are identified with the appropriate stock-keeping unit (SKU) number and the quantity received recorded. • Dispatch goods to storage – where goods are sorted and stored away. • Hold goods – where goods are kept in storage and under proper protection until needed.

11. WAREHOUSE ACTIVITES d. Pick goods – items required from stock must be selected from storage and brought to a marshalling area. e. Marshal the shipment – where goods making up a single order are bought together and checked for omissions or errors. Order records are updated. f. Dispatch the shipment – where the orders are packaged, shipping documents prepared and goods loaded on the right vehicle. g. Operate an information system – a record must be maintained for each item in stock showing the quantity on hand, quantity received, quantity issued and location in the warehouse.

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