Question

III. The inventory management process involves six functions. List these functions and identify and explain the documents and/or records that would be used by a manufacturing company in each process. 

Answer 1

Technological Responsibility for the State of Different Materials:

This may include the method of storage, maintenance procedures, studies of deterioration and obsolete materials and corrective action required.

Stock Control System:

This includes purchase procedures of materials, ordering policies, physical verification and records of items stored.

To Ensure the Timely Availability:

Of requisite input materials and avoid building up of stock levels of final product.

Maintenance of Specified Inputs:

Specified raw materials, finished components/parts work m process, general supplies in sufficient quantities are maintained to meet the production requirements of the enterprise.

Protection of Inventories:

The inventories are to be protected from improper material handling; wrong and unauthorized removal from the stores.

Pricing:

Pricing of all input materials being supplied to various shops is essential for further cost estimation of final products.

Inventory Control uses the following documents for entering and maintaining information:

• Stock Requisition (SR)
• Pick and Issue (PI)
• Issue Confirmation (CI)
• Over the Counter (OC)
• Stock Return (SN)
• Inventory Adjustment (IA)
• Physical Inventory Purchase Input (IP)
• Stock Transfer Issue (TI)