WELCOME

TO
MY PRESENTATION
Inventory
 Presented
by
Mst. Sahida khatun
Nursing Instructor
Rajshahi Nursing College Rajshahi
Email. [email protected]
Mobile. 01745615821
Definition:
Inventory refers to the goods, materials, and assets that
a business carries for day-to-day operations. Inventory
may be held for production, sale, or resale purposes.
Often, different types of inventory serve different
business purposes.
Inventory refers to the stock of goods, materials, or
products that a business holds for the purpose of
resale, production, or use in operations. It represents a
current asset on a company's balance sheet and is a
crucial component of supply chain management.
Inventory refers to the stock of goods that a
company holds for sale or use in production,
including raw materials, work-in-progress, and
finished goods. It's a key component of a
company's assets and is crucial for meeting
customer demand and maintaining efficient
operations.
Types of Inventory
Inventory can be classified into several categories
based on its stage in the production process, purpose,
and usage. Here are the main types:
1. Based on Production Stage
Raw Materials – Basic components used to
manufacture products (e.g., steel for cars, fabric for
clothing).
Work-in-Progress (WIP) – Partially finished goods
still in production (e.g., assembled but unpainted
furniture).
Finished Goods – Completed products ready for sale
(e.g., packaged smartphones, bottled beverages).
2. Based on Function & Purpose
MRO Inventory (Maintenance, Repair, and
Operations) – Supplies used to support
production but not part of the final product
(e.g., lubricants, cleaning supplies, tools).
Safety Stock – Extra inventory kept to
prevent stock-outs due to unexpected demand
or delays.
Cycle Stock – Inventory ordered in regular
cycles to meet average demand.
Pipeline (Transit) Inventory– Goods in transit
between suppliers, warehouses, and customers.
Theoretical (Phantom) Inventory – Inventory that
should exist according to records but may be lost,
stolen, or misplaced.
Anticipation Inventory-Stock built up in advance of
expected demand spikes (e.g., holiday season).
Decoupling Inventory – Buffer stock between
different production stages to prevent bottlenecks.
3. Specialized Inventory Types
Service Inventory – In service industries, this
refers to unused capacity (e.g., hotel rooms, airline
seats).
Dead Stock – Obsolete or unsellable inventory
that may need to be discarded or sold at a discount.
Consignment Inventory – Goods held by a
retailer but still owned by the supplier until sold.
Function of inventory
The function of inventory refers to the roles it plays in
ensuring smooth business operations, meeting customer
demand, and optimizing costs. Key functions include:
1. Meeting Customer Demand (Demand Fulfillment)
Ensures products are available when customers need
them.
Prevents stockouts and lost sales.
2. Smoothing Production & Supply Chain (Buffer
Against Variability)
Acts as a buffer between supply and demand
fluctuations.
Compensates for delays in raw material supply or
production issues.
3. Economies of Scale (Bulk Purchasing &
Production)
Allows businesses to buy materials in bulk at
discounted rates.
Enables cost-efficient production runs.
4. Reducing Lead Times (Decoupling Function)
Separates different stages of production/supply chain
to avoid disruptions.
Ensures continuous operations even if suppliers are
delayed.
5. Seasonal & Anticipatory Stock (Managing
Fluctuations)
Helps businesses prepare for peak seasons (e.g.,
holidays, festivals).
Mitigates risks from price increases or supply
shortages.
6. Work-in-Progress (WIP) Inventory
Supports ongoing production processes by keeping
semi-finished goods ready for the next stage.
7. Safety Stock (Risk Mitigation)
Extra inventory kept to handle unexpected demand
spikes or supply delays.
8. Speculative Inventory (Price & Supply
Advantages)
Stockpiling inventory in anticipation of future price
increases or shortages.
Uses of Inventory
Inventory serves multiple purposes in business
operations, supply chain management, and customer
satisfaction. Below are the key uses of inventory:
1. Ensuring Product Availability
Prevents stock-outs and ensures customers can
purchase products when needed.
Maintains smooth sales operations without
interruptions.
2. Supporting Production Processes
Provides raw materials and components for
manufacturing.
Maintains work-in-progress (WIP) inventory to keep
production lines running.
3. Reducing Supply Chain Risks
Acts as a buffer against delays in supplier deliveries.
Helps manage demand fluctuations and unexpected
disruptions.
4. Taking Advantage of Bulk Discounts
Allows businesses to purchase materials in large
quantities at lower costs.
Reduces per-unit procurement expenses.
5. Meeting Seasonal Demand
Helps businesses prepare for high-demand periods
(e.g., holidays, festivals).
Ensures sufficient stock is available when sales peak.
6. Improving Customer Service & Satisfaction
Faster order fulfillment due to ready stock.
Reduces backorders and waiting times for customers.
7. Stabilizing Prices & Avoiding Shortages
Businesses can stockpile inventory if they expect
price increases.
Prevents losses due to sudden supply shortages.
8. Facilitating Efficient Operations
Reduces machine idle time by ensuring materials
are always available.
Supports just-in-time (JIT) and lean manufacturing
when managed properly.