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Presented by: Anum Zehra
Shahina Yasmeen
Samena Yasmeen
Afsheen Ghani
INTRODUCTION
In this presentation we shall be discussing that
aspect of a business which deals with its goods,
what are they, how they are stored i.e. inventory,
how this inventory is controlled and managed to
maintain an optimum stock, the major modes of
transportation of these goods and how are they
stored in warehouses for present & future use.
TYPES OF GOODS
Goods are generally divided into 5 categories
o Capital Goods e.g. factories, machinery etc.
o Supplies i.e. Typewriter ( is a capital good ) needs paper (which are the
supplies).
o Raw material & parts e.g. grain, chemicals, mechanical or electrical
motors etc.
o Goods in Process (also called semi finished goods)
o Finished goods
NOTE
It is important to note that ONE COMPANIES RAW MATERIAL OR
SUPPLY IS THE FINISHED GOOD OF ANOTHER e.g. nails or wooden
planks are finished goods of one company but are raw material/supply of
anothers.
Of all the categories the largest stock piled goods are the GOODS IN
PROCESS as they can be required at any time.
TYPES OF CONSUMER GOODS
Depending about durability & preference consumer goods are divided into the
following groups.
Handling cost
Loading & unloading & movements of materials.
Misc. cost
Cost of stationary, racks, cupboards, counters, furniture etc.
Government taxes.
Interest or borrowed funds used to purchase items.
Change in demand as well as seasonal change
MAJOR REASON FOR CONTROLLING
INVENTORY
In some cases it is good to have materials & components in stock but
at the same time it can also be dangerous because if there is a change
in the model, in the companies product or just a particular component
is unsuitable the stock will be discarded or outdated.
Also some times cost may vary it can be high or with time deteriorate.
So, its always safe neither to be overstocked nor under stocked & to
assure this a company should be aware of current trends & forecast.
And if this is done properly the person responsible for this job can
save a lot of money for the company as well as eliminate waste in the
quality of goods selected, in the quantities ordered & can be used in
the expenditures for transportation, storage & distribution to the
market.
DEPARTMENTS RELATED TO
INVENTORY
Stores Department
This department maintains a min. quantity known as a
SAFETY LEVEL of stock. Once stock goes below this level it
must be restored.
Inventory Record Department
As the name implies this department keeps all the inventory
records. All incoming & outgoing items should be recorded
immediately.
Purchase Department
This department is responsible for buying, stocking,
requisition issuing & shipping goods.
METHODS OF CONTROLLING
INVENTORY
They are of two types
Perpetual inventory system.
Periodic inventory system.
Perpetual Inventory System where a business keeps continuous,
moment to moment records of the number values & type of inventions
that it has.
Periodic Inventory System where one does periodic inventory count
(such as once a month or at the beginning & end of the yr).
FACTORS FOR BUYING GOODS
Before purchasing goods following points should be kept in mind
Right price.
Right quality.
Right quantity.
Right time.
Right supply source.
When a purchasing agent goes to the market he/she should know
What product to buy ?
What quality, variety, grade, brand is required ?
How much quantity is to be purchased ?
Determination of price ?
STEPS IN PLACING ORDERS
Always keep in mind most often bulk quantities are ordered when
purchasing any good for any given business.
Determination of need in order to maintain an optimum stock when a
product is required a request called purchase requisition is issued. This
requisition contains details of the required goods as well as the quality &
quantity required.
Survey or market research it is conducted to have the following info
Location of supplies &type of goods they deal in.
Quality, variety & brands available.
Services, warranties & guarantees available with the goods.
Delivery period.
Credit & sales return facilities extended to buyers.
Type of discount offered.
Placing the order having done the above mentioned steps the buyer
places the order. It specifies the brand, quality, quantity, price, amount,
discount, delivery date & mode.
Sometimes goods may never even stop moving during this rearrangement
i.e. going through one door & leaving through the other.
TYPES OF AUTOMATION
Automation it is the use of control system i.e. to reduce human effort
in the production of goods & services.
Distribution centers are divided into 2 kinds:-
Soft automation in this paperwork & goods selection are
automated BUT employees must still collect, sort & label the
goods themselves.
Hard automation it is that center where computers &
machines gather various items from the slots/ areas & prepare
the shipping documents.
SUMMARY