Question

The manager of an organisation is concerned about the amount of material that is in inventory for extended periods. The manager has asked you to investigate and report back to them. From what systems could you extract the data to prepare your report? Discuss in 50 to 80 words.

Answer 1

To investigate material in inventory for an extended period, we need to extract data from the inventory and warehousing system.

Inventory system will give the ageing of data regarding available inventory. The warehousing system will give the location of the items in the warehouse.

The inventory system has data about item wise date of receipt, issue and balance of items.

We can extract data on the items balance in inventory and their date of receipt. If the company is using the FIFO system, the latest receipts will be shown in the inventory balance.

After extracting data on items available in inventory and their receipt dates, an ageing analysis should be done and the available inventory should be segregated in number of categories based on date of receipt , for example:

Category	Ageing	Item number	Recept date	Quantity	Value	Percentage of total value
A	0-1 month
B	1-3 months
Category	3-6 months
D	6-12 months
E	Beyond 12 months

Category E items should be further analysed by extracting locations of these items from the warehousing /Stores system. Physical verifications of existence and condition of these items should be given in separate report