Thursday, July 24, 2008


Major goals
· Minimise inventory investment
· Maximise customer service
· Assure efficient plant operation
Common Subgoals
· Low unit cost
· High inventory turnover
· Consistency of quality
· Favourable supplier relation
· Continuity of supply
Inventory turnover
· A performance measure for inventory control
· It is the velocity with which materials move through the organisation
· It is the ratio of the annual cost of goods sold (from income statement) to the
average or current inventory investment (from balance sheet)
· This ratio computes

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