Production Planning & Quality Assurence

GRPUP-A
1. Define Quality control?
The quality control is an operational technique and activities that are used of fulfill requirements for quality.
2. Define standardization?
Standardization: A framework of agreements to which all relevant parties in an industry or organization must
adhere to ensure that all processes associated with the creation of a good or performance of a service are
performed within set guidelines. This is done to ensure the end product has consistent quality, and that any
conclusions made are comparable with all other equivalent items in the same class.
3. Define Quality Assurance?
QA is a set of activities for ensuring quality in the processes by which products are developed.
4. Define Surveillance
Quality Surveillance: The continuing monitoring and verification of the status ofprocedures, methods,
conditions, processes, products and services and analysis ofrecords in relation to stated references to ensure that
specified requirements forquality are being met.
5. What do you understand by planning, Inventory?
Planning begins with an analysis of the given data, on the basis of which a schemeof utilization of the firm's
services can be outlined so that the desirable target maybe most efficiently attained.
Inventory constitutes one of the most important elements of any systems dealingwith the supply, manufacture
and distribution of goods and services.
6. Whatis Technical store?
Technical Stores is a part of Stores and Purchase Directorate and is responsible for all sorts ofpurchase both
foreign and local to meet organizations requirement.
7. What do you understandbyprocurementlevel?
It is a level which is set to cover the reduction rate in such a manner as to ensure stockavailability until no
supplies are received.
8. Whatis Check, Inspection?
Inspection means examination of an item against a specific standard.Inspection in relations to an aircraft,
aircraft components or parts means examination either visually orby any other means to determine the condition
of an aircraft, component or parts.
Check means to operate for measurement of an assembly or component to determine the operatingcondition of
mechanism and examination or comparison of its operational characteristic with thestandard operational
characteristic of this mechanism.
9. What do you understandbycounterfeitpart?
A part made or altered so as to look like an approved part without authority or right, andwith intend to
misinform by passing the fake as original or genuine.

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10. Whatis concession?

"Concession" means any departure from the requirements of the ANO as may be granted by the
Chairman CAAB, if he feels it will not endanger safety.
11. Whatis productionprocess?DefinePPQC?
Production Process is a process of producing goods and services by combining and utilizing the services of
factors of production.
PPQC: It deals with general management of an organization, its inventory system, procurement & quality
system specially focused on Airlines.
12. DescribeTQM?
Total Quality Management (TQM) is not a separate quality assurance department. In this the professionals will
need lot communication with various departments to improve quality through awareness and case studies, these
professionals will need to become 'quality assurance' people and not 'quality control' people.
13. Whataretheobjectsof Zero defect?
Zero defectsis a motivation program to eliminate defects in industrial production. It originates in the aerospace
industry during 1961-62. Its goal is to minimize defects in minimum.
14. Describe Quality Audit?
It is a systematic and independent examination to determine whetherquality activities and related results comply
with planned arrangements and whetherthese arrangements are implemented effectively and are suitable to
achieveobjective.
15. Whatis ISO9000
ISO 9000 is a series of standards, developed and published by the International Organization for
Standardization (ISO), that define, establish, and maintain a quality assurance system for manufacturing and
service industries.
16. What is production planning?
Production planning:Production planning translates the output forecast of an AMO into planned maintenance so
that the production remains optimum with the available resources.
17. Whatis modification?
Modification:Any further change of design or other change of aircraft parts, material, equipment which is
approved by manufacturer and regulatory authority is called modification.
18. Whatis inspection?
Inspection: Inspection in relations to an aircraft, aircraft components or parts means examination either visually
or by any other means to ascertain the condition of an aircraft, component or parts.
19. Whatis MOE& MCM?
MOE: Maintenance Organization Exposition (MOE) means a document endorsed by the head of the
Organization which details the parent companys brief description, structure, information on paid-up capital,
name of the Chief Executive of the Organization and Directors/ Senior Executives of the Organization including
their responsibilities (i.e. Administrative, Financial, Engineering etc.).
MCM: It is an approved manual required for approved AMO. It deals with all the departments and their work
area, function and responsibilities.
20. Define lead assessor, Approved store, lead time, MCC?
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Leadassessor: An assessor how is qualified and authorized to perform all or any portion of a quality system
assessment.
Approvedstore: It is the store of an approved organization and shall consist of quarantine and bonded store.
Lead Time: The time elapsed between purchase order date and the goods received date.
MCC: The MCC coordinates maintenance activities and requirements between various departments with the
organization to ensure timely rectification of technical snags and flight schedule integrity.
21. Whatis special inspectionandwhen itis carriedout?
The inspection which does not come in preview or normal schedule is called special inspection.
It is carried out for following
a. Inspection of engine after surge
b. Aircraft inspection of engine after check load
c. Inspection of aircraft or engine after lightening
d. Inspection after heavy landing
e. Inspection after heavy weather flight.
22. Whatis operational check?
Operational check: A qualitative check to determine that a system or component is operating in a normal and
intended manner, known as operational check.
23. Whatis periodic check?
Periodic check: Check performed in stipulated time intervals known as periodic check.
24. Define approved or unapproved parts?
Approved part: The part or component which is conforming the manufacturers specifications is called
approved parts.
Unapproved part: The part or component which is not conforming the manufacturers specifications is called
unapproved parts.
25. Whatis non-conformity?
Non-conformity means failure to conform to accepted standards, conventions, rules, or laws of CAAB.
26. Define compliance Audit?
It is an Audit undertaken to confirm whether an organization is meet the terms of regulatory authority.
Short
1. What is the difference between Quality assurance & control?
Quality Assurance refers to management system of an organization which provides, assurance that the design,
manufacture, inspection and testing have been carried out to the required standard and provides evidence that
this has taken place. On the other hand quality control refers' to the actual physical actions i.e., inspection and
tests.
The quality control is an operational technique and activities that are used of fulfill requirements for quality.
Quality Assurance on the other hand is as management system and includes activities, methods and procedures.
2. What is the difference between schedule & unscheduled maintenance?
ScheduleMaintenance
UnscheduledMaintenance
This type of maintenance performed in defined This type of maintenance has no pre-plan
intervals
It laid down on Aircraft maintenance schedule It rise from AML entry, CML entry, NRC
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Example; A check, weekly check, 50/100 FH

checksetc.

during scheduled maintenance

Trouble shooting of any problem which is
reported by pilot.

3. What is maintenance schedule and what are the source documents?

Aircraft Maintenance Schedule is an approved document in which defined intervals of aircraft maintenance is
laid down to maintain the continued airworthiness of the aircraft.
Source documents of preparing maintenance schedule are:
Maintenance Review Board (MRB) document
Maintenance Planning Document (MPD)
Airworthiness Directives (AD)
National and CAAB requirements
Organizational experience

4. What are the situations of un scheduled maintenance and what are the sources of approved data
maintenance?
The necessity of unscheduled maintenance arises in the following situation:
Aircraft maintenance Log (AML) entry
Cabin maintenance Log (CML) entry
NRC during scheduled maintenance
Sources of approved data maintenance:
AMS(Aircraft Maintenance Schedule)
AMM/CMM(Aircraft Maintenance Manual/ Component Maintenance Manual)
IPC(Illustrated Parts Catalogue)
SRM (Structural Repair Manual)
WDM (Wiring Diagram Manual)
AWL (Aircraft Wiring List)
EOs (Engineering Orders)
5. What are required manual prepared and approved for AMO?
Following manuals are prepared andapprovedfor AMO;
Maintenance Control Manual (MCM)
Aircraft Maintenance Schedules (AMS)
Component Operating and Storage Limit (COSL)
Maintenance Procedures Manual (MPM)
Minimum Equipment List (MEL)
Safety Management Manual (SMM)
6. Whatis functional check?
The procedures necessary, particularly after the change of an unit or assembly to determine the operating
condition of an aircraft, engine, propeller or component by measurement and/or operation making any repair
necessary to ensure Airworthiness of the aircraft, engine , propeller or component.
7. Engineering planning function?
Engineering Planning Department functions for implementation of approved scheduled maintenance program
(AMS & COSL), incorporation of modification, inspection and repair arising out of technical literature such as
AD, SB etc. so that aircraft are maintained in accordance with Airworthiness requirements and maximum
economy is achieved.
8. What is quality Audit, How many types of Audit in AMO?
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It is a systematic and independent examination to determine whether quality activities and related results
comply with planned arrangements and whether these arrangements are implemented effectively and are
suitable to achieve objective.
Types of audit:
a. 1st party Audit/ Internal Audit
b. 2nd party audit/ External audit
c. 3rd party audit/ Certification audit
9. Explain Random Audit?
Random audits carried out on a sample basis when maintenance is being carried out. Random audits include
audits done during the night.
10. Explain component Hold procedure?
It is a method of determining the status of a suspected component that has been removed from an aircraft to
facilitate trouble shooting thereby negating the need in proven cases, for unnecessary workshop visits. The
affected system is monitored until it is satisfied that the defect has/has not been rectified. This period should not
exceed 7 (seven) days. A HOLD tag is labelled during this time.
If the component declared unserviceable, "HOLD" label is removed, and an "Unserviceable" tag is labelled or
"Serviceable" tag is labelled if the component declared serviceable.
11. Whatis Quality Plan?
A quality plan is an aid to implementing the quality system. It lays down activities that must be undertaken at
various levels and provides a system for monitoring these activities. Every product or contracted job requires its
own quality plan, which should define:
The quality objectives to be attained.
The specific allocation of responsibilities and authority during the different phase of the project
The specific procedures, methods and work instructions to be applied.
Suitable testing, inspection, examination and audit programs appropriate stages
A method for implementing changes in a quality plan as projects proceed.
Other measures necessary to meet objectives.
12. What is Override Authority?
Override authority: where there is a conflict between AME and Q.C. supervisor for any inspection or task, the
Q.C. supervisor has the right to override the maintenance engineer. This is called override authority.
13. ExplainCauseof Quality problem?
Cause of quality problem:
Lack of organization
Lack of training
Lack of resources
Lack of time
Lack of top management support.
14. Write down the Objective of QA Audit?
TheObjectivesof QA Audit are given below:
To determine the conformity and non-conformity of the quality system with the specific requirements
To determine effectiveness of the implemented quality system in meeting the object.
To provide the audit with an opportunity to improve quality system effectiveness
To evaluate supplies product.
To verify organization own quality system against a quality system to identify improvement area.
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Certification

15. Function of Standard of laboratory?

It is a section of an inspection and Q.C. to carry out the calibration/ test of tools, equipment in accordance with
established standard procedure. All tools, meters, gauges and measuring instrument should have calibration
level.
16. Explain NDT?
Nondestructive testing or Non-destructive testing (NDT) is a wide group of analysis techniques used in science
and industry to evaluate the properties of a material, component or system without causing damage.
The terms Nondestructive examination (NDE), Nondestructive inspection (NDI), and Nondestructive
evaluation (NDE) are also commonly used to describe this technology.
17. Define Product sampling?
Production sampling is intended to complement the requirement for certifying personal to be satisfied that all
the required maintenance has been properly carried out before the issue of the certificate of release to service.
18. What is manufacturing?
Manufacturing includes in all the actions and processes which result in the production of finished articles. It
consists of;
Preparing for production
Receiving materials
Making components
Assembling units
Checking the quality of the parts and assemblies
Testing the finished articles
Painting
Packing
Shipment etc.
19. Write down the types of production?
There are three types of production which represent their basic approaches to production. The three types are:
Job production.
Batch production.
Flow production.
20. What is production process?
It is sequence of operations that transforms-material from a given to a direct form. The transformation may be
done in one or in combination of the following ways:
Transformation by disintegration,
Transformation by integration, and
Transformation by service.
21. What is objective of Zero Defects?
The two basic objectives of zero defects are:
a. It guarantees improvement through theidentification and removal of the causes of errors, and it allows
every employee inthe company to participate in the program freely and effectively. Managementcan
best support the zero defects program by indicating a willingness to give ZeroDefects as much
consideration as it gives to the problems that bother its customers.
b. Statistical design of experiments is a proven technique that continues to showincreasing use in the
industries. As the Research and Development function comesunder increasing pressure to produce fast,
accurate results, more scientists andengineers have been using the experimental design.
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Descriptive
1. Write down the Procurement level of store & Purchases?
Procurement level of store and purchase:
AOG
IOR- Immediate operational request
URR- Urgent repair request
Most immediate
Normal
2. When concession/dispensation asked from CAAB?
When deferred defect date is expired and Q.C. seekconcession from CAAB for continuing the aircraft flying.
When the defect which is not covered by MEL but safe flight is possible and flight operation, maintenance
engineering and CAAB agrees in this case Q.C. applies to CAAB for dispensation.
3. Work area of QC in AMO
The working areas of Q.C. are given below:
Quality assurance inspection
Major and repeated defects investigation
NDT
Surveillance Inspection
Store Inspection
Agreements of approval and AME license exam
Forwarding daily performance reports, incidents/accidents reports for AELD
Any other negotiation with CAAB regarding airworthiness matter.
4. What inventory control and reason is for maintain it?
Inventory control may be defined, a planning, ordering and scheduling of materials used in the manufacturing
process. There are various reasons why an organization should maintain inventories of goods. The fundamental
reason for doing so is that it is either physically unsound to have goods arrive in a given system precisely when
demands for them arises.
Without inventory production processes have to wait until their orders filled from a source or were
manufactured. In general it will disrupt total production level, its planned objectives and its overall reaction
goes to the customer who fin airlines schedule and standard of service is deteriorated. These are the reason
maintaining inventory in an organization. It also required to maintain continuous flow of production.
5. Demand priorities practiced in aviation?
These are the Demandprioritiespracticedin aviation:
AOG
IOP- Immediate operational request
URR- Urgently repair request
Most immediate
Normal
6. Duplicate inspection and its certificate on and duplicate inspection item?
Duplicate Inspection: A duplicate inspection is defined as an inspection first made and certified by one qualified
person and subsequently made and certified by a second qualified person.
Certification: All duplicate inspections carried out on Aircraft control system must be certified in the
appropriate work document. A signature is to be made in the first column by the AME responsible for the work.
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The second column is to be made by the appropriate AME performing the duplicate inspection that was not
associated with the work.
Duplicate Inspection Items: any Modification, Major Repair, Installation, or Adjustment / Test of the following
systems or components installed on aircraft:
Flight Controls
Fuel system
Landing Gear
7. How & what category Aircraft associated spares and item received by store?
Aircraft and associated spares received by the organization is normally divided in two categories;
Category A: item requiring physical and document inspection by store inspector sector. All loose and unpacked
O rings are category A items.
Rotate able components
Repairable components
Self-life items
Rubber items
Fire protection equipments
Brand mew components for approved source
Raw material i.e. sheet metal, tubing, airborn oxygen, breathing equipment etc.
Category B: Item requiring detailed check of documents and minimum check of individual item by store
inspector.
These are consumable parts i.e. bolt, nut, washer, fasteners, packet seal and rubber items.
8. What are the Responsibilities of QC?
The QC has following responsibilities:
a. Maintain continuing airworthy of aircraft as per MCM of the organization to achieve high quality of
maintenance standard through Surveillance Inspections during various types of aircraft maintenance,
b. Audit of all maintenance records and calibration of all tooling and equipment used for maintenance,
c. Investigation into incidents, major damages of aircraft any other occurrences that may affect
airworthiness.
d. Inspection of spares and materials purchased by the organization,
e. Liaison with CAAB for all airworthy matters related to aircraft maintenance including renewal of C of A
and Company Approval
f. Liaison with CAAB for granting concession / dispensation / waiver / deviation on airworthiness matter.
g. Liaison with CAAB for issue of Aircraft Maintenance Engineers' Licence in accordance with applicable
rules and orders.
h. Audit of Maintenance and other records,
i. Provide NDT and Standard room services for maintenance of Aircraft.
9. What is forecasting and tracking activities of production planning?
The forecastingandtrackingactivities of production planning are given below:
Forecasting:Schedule Maintenance shall be forecasted for Short & Long term basis.
a. Short Term Forecasting (1 month)
b. Long Term Forecasting(1 year)
c. Special Operation
d. Contents of Forecast
e. Method of Forecasting
f. Amendment of Forecast:
Tracking:It is done by planning department of any airline and they make task card and job card such as;
a. Tracking of Routine Tasks / Checks:
Pre-flight Check
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 Daily Check
Weekly Check
Letter Check
b. LLP, TLW & Repetitive Task:
c. Modification/Repair
d. Deferred Item
10. Write down the Role of MCC?
The Maintenance Control Center (MCC) generally performs the followings:
a. Coordination role: A group of Engineers will monitor all the activities related to maintenance and will play
a coordination role.
b. Monitoring function: The MCC will monitor the operating aircraft & aircraft out-of-service due to technical
reasons and will ensure flight schedule integrity.
c. Technical Support: The MCC will assist line maintenance and outstations in troubleshooting, fault
identification and correction of discrepancies.
11. Explain control assurance function of QC
Quality Assurance refers to management system of an organisation which provides, assurance that the design,
manufacture, inspection and testing have been carried out to the required standard and provides evidence that
this has taken place. On tire other hand quality control refers' to the actual physical actions i.e., inspection and
tests.
The various quality control actions are:
Product testing
Checking of components
Calibration of inspection equipment
Process control maintaining.
The quality control is an operational technique and activities that are used of fulfill requirements for quality.
Quality Assurance on the other hand is as management system and includes activities, methods and procedures
such as:
Control and issue of working drawings
The qualification criteria
The identification of inspection status.

12. Explain inventory control with refer to lead time?

Inventory is wider sense is defined as any idl resource of an enterprise. It is commonly used to indicate
materialsraw, in process, finished, packaging, spares and others--stocked in order to meet an expected
demand or distribution in thefuture. It is planned in such a manner that will not hamper the production process.
The inventory control depends mainly on procurement and consumption. So the consideration of lead time and
safety stock or buffer reserve comes into consideration.
Where lead time is the elapsed time between the demand of goods and receiving goods. The safety stock is the
stock calculated by consideration maximum and minimum and monthly consumption materials.
13. Explain the roleof production manager?
Production manager is one of the managers in the larger system of the organization. Now as production
management is a sub-system of the business organization, similarly business organization is also a sub-system
in the environment of the business. The Production manager must perceive his role in all the three systems. To
understand his role in a business environment he must examine first the Objective of Business Organization.
The first objective of any organization is to survive and remain in business and to make reasonable profit.
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14. Show an organization structure of an airline organization?

15. Describe the function of control engineering?

The quality control involves the following activities;
a. It is the management activity.
b. It is the activity of planning.
c. It is the activity of gathering data.
d. It is the activity of recording and handling the data collected.
16. Describe the function I& QA?
The functional areas of Inspection and Quality Assurance department are the following:
a. Quality assurance inspection
b. Quality assurance program evaluation
c. Quality control during major checks
d. Special procedure for defect investigation and NDT
e. Store inspection procedure
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f.
g.
h.
i.
j.

Quality assurance audit

Assurance of quality manpower and training
Human factor training & evaluation
License examination and inspection permit
Communication with caab regarding different reports and airworthiness related matters

17. Write down the advantage of Production planning and control?

The advantages of production planning and control are;
Accurate picture of present, future load on various machines could be available.
Optimum scheduling viz. the expert knowledge would beavailable.
Proper evaluation of the effect of each new order could be possible.
More accurate delivery commitments can be made
Inter-departmental coordination would be improved.
More realistic evaluation of delays and departmental shortcomings.
Low inventory in process.
Lead time will be reduced because of optimum scheduling,
18. Write down the disadvantage of Production planning and control?
The disadvantages of production planning and control are;
No expert knowledge is used in the technique of PPC.
Overburden on foreman.
Very little opportunity for overall planning and coordination among variousdepartments of the factory.
No counter check will be possible.
No process inventory will be high.
No accurate picture of machine loading will be available and there will bedifficulty in deciding the
delivery periods of future orders.
Sequence of jobs may not be as required for meeting the deliveries, but theyare, more likely as per the
availability of machines.
19. What are the Benefit of quality control?
TheBenefitsof quality control are;
Better understanding of processes and product.
Helps in building information system for improving quality and reducing cost and coordinating the
activities of various departments.
Increased production under same set-up.
Reduction of cost per unit.
Reduction of scrap.
Saving excess use of materials.
Reduction in inspection.
Evaluation of scientific tolerances.
Maintaining operating efficiency.
Less customers complaint.
Increasing quality consciousness.
Building quality into the product rather than inspecting it.
It helps in planned collection and effective use of data in studying cause effectrelationships which lead
to corrective action on the process.
Reduction in overhead expenses.
Increase in goodwill.
Reduction in the idle time loss of machine and equipment as well as operational staff.
20. Describe& show aflow chartof TotalQuality Control?
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21. Write down the difference between Quality control and quality Assurance system?
Quality assurance
Quality control
Definition
QA is a set of activities for ensuring
QC is a set of activities for ensuring
quality in the processes by which
quality in products. The activities focus on
products are developed.
identifying defects in the actual products
produced.
Focus on
QA aims to prevent defects with a
QC aims to identify (and correct) defects
focus on the process used to make the
in the finished product. Quality control,
product. It is a proactive quality process therefore, is a reactive process.
Goal
The goal of QA is to improve
The goal of QC is to identify defects after
development and test processes so that
a product is developed and before it's
defects do not arise when the product is released.
being developed.
How
Establish a good quality management
Finding & eliminating sources of quality
system and the assessment of its
problems through tools & equipment so
adequacy. Periodic conformance audits that customer's requirements are
of the operations of the system.
continually met.
What

Responsibility

Example
Statistical
Techniques

As a tool

Prevention of quality problems through

planned and systematic activities
including documentation.
Everyone on the team involved in
developing the product is responsible
for quality assurance.
Verification is an example of QA
Statistical Tools & Techniques can be
applied in both QA & QC. When they
are applied to processes (process inputs
& operational parameters), they are
called Statistical Process Control
(SPC); & it becomes the part of QA.
QA is a managerial tool

The activities or techniques used to

achieve and maintain the product quality,
process and service.
Quality control is usually the
responsibility of a specific team that tests
the product for defects.
Validation/Software Testing is an example
of QC
When statistical tools & techniques are
applied to finished products (process
outputs), they are called as Statistical
Quality Control (SQC) & comes under
QC.
QC is a corrective tool

22. Describe the quality Reliability?

Reliability is a word used to forecast acceptability of system or process is in compliance or assured.
Quality Reliability was the theme of the Asian Productivity Council during a seminar in 1970. In India, as in
several other countries of the Asian region, it has been atremendous task to create an awareness among
management of the importance of quality. It is estimated that about 56000 factories are existing in the organized
sector. Out of this, about 15,000 are large scale establishments. Out of these perhaps 10% of the factories have
been directly or indirectly covered by the SQC training courses. This, of course, has touched only the fringe of
the problem. Still lot many efforts are needed to introduce quality consciousness. The productivity councils
with its local productivity councils are also heading towards quality consciousness.
23. Describe about the objective of quality audit?
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The quality audit is not designed with the object of criticism or blame but with an object to improve the quality
of company products, to ensure that procedure to maintain quality. Audit also ensures that if non-compliance
with them is due to their working and to take corrective action to improve the product. The audits are designed
for one more of the following purposes:
a. To determine the conformity or non-conformity of the quality system withspecified requirements.
b. To determine the effectiveness of the implemented quality system in meetingspecified quality
objectives.
c. To provide the audit with an opportunity to improve quality systemseffectiveness.
d. To evaluate, a supplier where there is a desire to establish a contractualrelationship or comparing of 2
or more suppliers or monitors a suppliers.
e. To verify organizations own quality systems against a quality system standard and to identify
improvement areas.
f. Certification.
24. Describe the quality management system?
In the world of today, which is on the verge of technological revolution, the pursuit of quality will be constantly
presenting fresh challenges and only those firms that are able to meet these challenges will be able to survive.
To achieve consistent high quality, an industry cannot continue with the existing practice of receiving supplies
of uncertain quality from its vendors. The reasons against this procedure are exorbitant cost of inspection and
testing the supplies, which in tum, increases the cost of production and the time, lost in awaiting replacement
supplies against rejected lots. For consistency in the quality of products produced by an industry, it is of utmost
importance to ensure consistency in the quality of supplies from its vendors. But consistency in the quality of
products can be maintained by the industry as well as by its own supplies only if, both of them follow sound
procedures, methods and controls, applicable to their operations with regard to quality. Such procedures,
methods and controls, constitute the Quality Management System.
Quality Management SystemA Tool for Cost Reduction
The present day customer applies the criteria for assessing goods or services by value for money and, before
placing an order for supply of any product on a vendor, he would lilce to be convinced first by the vendor's
quality management system and then by the quality of the vendor's products. The customer therefore may insist
that he must approve the Vendor's quality management system, and the quality of vendors product as
contractual obligations before he can place orders on vendors for bulk supplies.
25. Describe Necessity and Advantage of Inventory control?
Necessity and Advantages of Inventory Control:
There are various reasons why organization should maintain inventories of goods.
The fundamental reason for doing so is that it is either physically impossible or economically unsound to have
goods arrive in a given system precisely when demands for them arises. Without inventories customers would
have to wait until their orders were filled from a source or were manufactured. In general, however, customers
will not or cannot be allowed to wait for long periods of time. For this reason alone the carrying of inventories
is necessary for almost all organization that supply physical goods to customers.
There are, nevertheless, other reasons for holding inventories. For example, the price of some raw materials
used by manufacturers may exhibit considerable seasonal fluctuations. When the price is low, it is profitable for
him to procure a sufficient quantity of it to last through the high price seasons and to keep it in inventory to be
used as need in production. Another reason for maintaining inventories, a reason particularly important to retail
& abolishments, is that sales and profits can be increased it one has an inventory of goods to display to
customer.
Furthermore to even out the workloads on the shops in the event of fluctuations loads and a protective buffer
against transportation delays and production rate changes.
Advantages
a. Introduction of a proper inventory control system helps in keeping the investment in the inventories as
low as feasible.
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b. Ensures availability of material by providing adequate protection against uncertainties of supplies and
consumption of materials.
c. Allows full advantage of economics of bulk purchases and transportation.
d. Reduces changes of going out of stock.
e. Leads to reduction in inventory levels.
f. Releases more of capital for other operations.
g. Increases profitability of an organization.
h. Adequate customer service.
i. Advantage of price discounts by bulk purchasing.
j. Providing flexibility to allow changes in production lines due to changes in demands or any other
reason
k. Even out the workloads on the shops in the face of fluctuating demands.

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