NEED OF INVENTORY CONTROL - Quantitative Techniques for management

The main objectives of Inventory Control are as follows:

  1. For Effective Cost Accounting System: Cost accounting system is useful only when there is a tight control over cost and inventory cost is a major part of total production cost.
  2. To Check Waste and Wastage: Inventory control not just only ensures uninterrupted material supply to production department but also ensures the control from purchasing to supply of finished goods to customers. So in this way it checks waste and wastage whether it is about time, money or material.
  3. To Check Embezzlement and Theft: Inventory control is to maintain necessary records for protecting theft and embezzlement.
  4. For the Success of Business: Customer’s satisfaction is very much important for the success of business and customer’s satisfaction is directly related to the goods supplied to them. If the goods supplied to customers are low in cost with good quality at right time, it ensures the success of business. Inventory Control helps in achieving this goal.
  5. For the Life of the Business: In absence of Inventory Control there are many risks of losses.
  6. To Check National Wastage: Inventory control checks the wastage of nation’s resources such as raw minerals, ores, etc.

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