INVENTORY MANAGEMENT ACROSS THE ORGANIZATION
Inventory management policies affect functional areas throughout a company. Let's consider why individual functional areas are concerned with inventory management policies.
Accounting is concerned because of the cost implications of inventory, such as the holding costs incurred, the capital needed to invest in inventory, and projected cash flow budgets. Accounting is concerned with all types of inventory.
Marketing is concerned because stocking decisions affect the level of customer service provided. Marketing's primary focus is finished goods inventory, where the goods are held within the distribution system, the response time to satisfy customers, and safety stock levels.
Information systems is involved because a system to track and control inventories is needed, especially when perpetual inventory records are used. Given the large number of SKUs and a high volume of inventory transactions, manual processing is impractical for most companies, so a computerized information system is essential.
Purchasing's workload is directly affected ...
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