Reserve - a form of existence of the material flow.On the way from the source of the traffic to the end user it can accumulate in any area.That is why to distinguish between supplies of raw materials, finished goods and other things.
basic definition
turns out that inventories are materials, raw materials, components, finished products and other valuables, which expect personal consumption or production.The presence of such benefits is associated with significant costs and seriously affects the performance of the enterprise.If the desired item is not found, it can cause a decrease in sales volumes, as well as dissatisfaction with consumers.Due to lack of raw materials for production can happen disruption or change in the production program, and it often results in a deficit of finished products and additional costs.
Nuances
Poor and in the event that there is an excess supply of spruce - is also a source of problems.Due to the excess of certain amounts arises the need for additional storage space, working capital, as well as costs associated with the payment of taxes and insurance.Products stored in a warehouse, it may become out of date, having lost some of its value.For many companies, the stock - a substantial portion of the assets.Simultaneously, a source of costs.If you reduce inventory by a few percent can significantly improve profits.
Features
turns out that the maintenance of a stock - it's a risk.If you are using their own funds, it is quite possible the immobilization of capital and debt financing when we can talk about an increase in interest expense of the enterprise.Another risk is associated with the possibility of theft or transfer of production in poor condition.Add to that a considerable amount of investment in stocks, the combination of these factors for any enterprise will be a significant part of the risk.
extent and nature of the risk depends on how the enterprise is located in the channel of distribution.For example, in wholesale trade due to the large range of products can occur a sharp increase in inventories and the cost of maintaining them, which are incommensurable with incomes from trade.The contents of the retail stocks have significant costs that are associated with the high cost of retail space.
dependence
reserves of the company - an important part, without which it can not do.This is due to the functions assigned to them.
primarily provide reserves for individual business units geographic specialization.Since the energy required for production, raw materials, water and labor, it is very often located far from major markets.Technological power required to produce these components and assemblies, is usually placed as close as possible to the sources of material resources in order to reduce transport costs.So unable to ensure economic production.
This geographic isolation components require transportation to the main production line.Moreover, this factor creates the need for inventories required for production.Products created in different locations is collected in storage for further picking and shipping to the consumer.And here it is important to the proper management of stocks, which will enable all optimized.
second function
Such a moment as balancing supply and demand, coupled with the existence of a time lag between the consumer and the production.The most obvious example can be considered as a seasonal production that is consumed during the year, it can be juice, canned food and so on.Opposite example could be antifreeze, which is carried out year-round production and consumption falls solely on winter time.Accounting for inventory allows you to do so, that will be provided economical production in a non-permanent demand.Planning is a difficult problem to overcome the time gap between production and consumption.When it comes to seasonal demand, the manufacturers, wholesalers and retailers traders need to create inventories before the seasonal peak demand occurs.Due to the accumulation of reserves can be avoided strong dependence of production and consumption of seasonal factors.
Another function
Balancing involves investing in the formation of savings, which will be used for the full season.Inventory management in this case is associated with such a problem, as the definition of the required volume to maximize sales with minimal risk of transition balances for the next season.
Another important point - protection against uncertainty.This function shift to insurance or buffer stocks, and it consists in smoothing the fluctuations of supply and demand.Planning in this case requires the determination of the desired amount of insurance savings.The need for them is associated with the uncertainty of future deliveries and sales for the replenishment of the resource base.
Safety stock - a way to protect against the two types of uncertainty.The first suggests that the demand within the framework of a functional cycle was suddenly more than expected.A second type is directly dependent on the fluctuations of the functional cycle.As an example of demand uncertainty can result in the following: the consumer has ordered more or less product than planned.There is still uncertainty in the second type, which occurs due to delays in the receipt of orders or processing them or because of problems with transportation.
additional time
Another function is to consolidate resources stocks, which is implemented by stockpiling unfinished products at the border of the stages of the production process, which ensures maximum efficiency of the production process to a single enterprise.Due to the previously accumulated stocks of the producer have an opportunity to send customers large quantities of goods at the lowest prices.
By consolidating resources can be accumulated or sell manufactured products in the required range.It turns out that this function is entrusted insurance business enterprise of uncertainty.
Conclusions
Options stocks are predetermining for the value of investment in them, which are required for the implementation of the plans developed by the company.Any specific strategy for the production and distribution will reduce the amount only to a level that will ensure the implementation of all four functions of stocks.If you have savings in excess of this minimum level, they considered to be excessive.That is why it is so important to consider stocks at all stages of the production cycle of the enterprise in any industry.Only in this case it is possible to provide an optimal ratio between accumulation and availability of resources to the finished product.
