Photo by Cheong Kwee Thiam
When the COVID-19 emerged in 2019, and thanks to technological advancement, the pandemic situation was ably commnicated rapidly to everyone. So, what did most private household people do? They stock up toilet papers, provisions, etc. Did you or your family do the same? If so, why did you do it? If not because of the pandemic, do you think these people would stock up the items aforesaid? The answer can still be a 'yes'! Why? Probably the items were offered with great discounts, i.e. a positive lure. 'Panic-buying' is the colloquial, although used at the onset of the pandemic, it may be applicable during sales period. After panic-buying, is there storage space at home? Will the stock be consumed timely for items with short lifespans? Do we even know what we have in stock? Will this lead to wastage? ... Hence, inventory management.
From your notes:
Stock is supply of goods and materials that are held by an organisation. They are formed whenever an organisation’s inputs or outputs are not used at the time they become available. An inventory is a list of things held in stock.
Reconciliation:
Basis the above COVID-19 discussion and 'stock' as aforementioned, we do not even know what we have in stock if we do not make an inventory of the items we 'panic-buy'. No?
Inventory Management (IM) is a component of supply chain management that involves supervising non-capitalised assets or inventory or stock items. Inventory management supervises the flow of goods from manufacturers to warehouses and from these facilities to point of sale (Pontius, 2019).
Reconciliation:
The definition of IM by Pontius (2019) seems to cover the commercial arena. Let us go back to the COVID-19 discussion and will you agree that IM applies to us, the public too?
Now, watch the YouTube video below for the entire topic:
This is a straight forward mini section for your reading: An '80-20 rule'; also known as the ABC analysis (also known as Pareto analysis) which we will cover in chapter 7.
This is about stock valuation, i.e. as stocks are current assets in a company’s account, it is therefore crucial to have an accurate value for stocks. An accurate stock value affects a company's overall value and performance.
Inventory control and management, 2nd edn, by Donald Waters, is available here. (Published by John Wiley & Sons Ltd, 2003)