1. The Basis of Inventory Control
Best practice in Inventory Management
Chapter 1
The Basis of Inventory Control
Best Practice in Inventory Management Dr Tony Wild

2. Figure 1.1 Which direction?
Low
inventory
Purchase price reduction ?
Customer
Service
Operating
efficiency
Best Practice in Inventory Management Dr Tony Wild

3. Figure 1.2 Warehousing Costs
Cost Element
Cost (£ P.A.)
Stores: extra area rent, heating etc.
500
Stores, equipment; trucks and racking
depreciation
maintenance
1,000
Stock Obsolescence
5,000
Storekeeper’s Wages and Employment Costs
14,000
Annual Stocktaking
Control Systems and Computer time
TOTAL
23,000
Plus financing charge 15%
300,000
TOTAL EXTRA COST
£ 323,000
Best Practice in Inventory Management Dr Tony Wild

4. Conflicting Advice
Best Practice in Inventory Management Dr Tony Wild