15. Deterioration cost etc. Which arises in the case of fashion items or items that changes chemically during storage such as medicines, foods etc.
16.
17. Lead Time – The time gap between the time of placing an order or the starting of the production and the time of arrival or delivery of goods to the inventory is called Lead Time. Also the time gap between the time of demand and the time of filling the demand from the inventory is called lead time. If this time is known (constant) and not zero then one may order in advance by an amount of time equal to the lead time. If it is a variable i.e., known only probabilistically than the question of when to order is difficult.
![aCCMAN INSTITUTE OF MANAGEMENT Project on Inventory Management[Type the document subtitle]SUBMITTED BY: MOHD.ARISH<br />INVENTORY MANAGEMENT<br />Inventory is a list for goods and materials, or those goods and materials themselves, held available in stock by a business. It is also used for a list of the contents of a household and for a list for testamentary purposes of the possessions of someone who has died. In accounting inventory is considered an assets.<br />Inventory management is primarily about specifying the size and placement of stocked goods. Inventory management is required at different locations within a facility or within multiple locations of a supply network to protect the regular and planned course of production against the random disturbance of running out of materials or goods. <br />The scope of inventory management also concerns the fine lines between replenishment lead time, carrying costs of inventory, asset management, inventory forecasting, inventory valuation, inventory visibility, future inventory price forecasting, physical inventory, available physical space for inventory, quality management, replenishment, returns and defective goods and demand forecasting.<br />Other definitions of inventory management <br />An inventory can be defined as a stock of goods which is held for the purpose of future production or sales. The stock of goods may be kept in the following forms:<br />Raw Materials<br />Partly finished goods<br />Finished goods <br />Spare parts etc.<br />The objective of an inventory problem is to minimize the total (actual or expected) cost or to maximize (actual or expected) profit.<br />Involves a retailer seeking to acquire and maintain a proper merchandise assortment while ordering, shipping, handling, and related costs are kept in check.<br />Systems and processes that identify inventory requirements, set targets, provide replenishment techniques and report actual and projected inventory status.<br />Handles all functions related to the tracking and management of material. This would include the monitoring of material moved into and out of stockroom locations and the reconciling of the inventory balances. Also may include ABC analysis, lot tracking, cycle counting support etc.<br />Management of the inventories, with the primary objective of determining. Controlling stock levels within the physical distribution function to balance the need for product availability against the need for minimizing stock holding and handling costs. See inventory proportionality.<br />TYPES OF INVENTORY<br />,[object Object]](https://image.slidesharecdn.com/inventorymanagement-100406162910-phpapp01/85/Inventory-Management-1-320.jpg)
