QQ.1. Differentiate between the following:
- (a)) What do you understand by inventory and its control. With the help of suitable examples, analyze the advantages and disadvantages of keeping inventory by a manufacturing company. (250-300 words)
- (b)) With the help of examples, explain the objectives of decoupling in inventory management. (250-300 words)
- Inventory: Stock of goods for use/sale (raw materials, WIP, finished goods, MRO).
- Inventory Control: Managing stock levels to balance holding costs and prevent stock-outs.
- Advantages of Inventory: Economies of scale, demand buffer, supply chain protection.
- Disadvantages of Inventory: High holding costs, obsolescence, capital tied up.
Answer: Inventory and its effective control are fundamental to the operational efficiency and financial health of a manufacturing company. Inventory represents the stock of goods a company holds, ranging from raw materials to finished products, crucial for meeting demand and facilitating production. Inventory control, on the other hand, involves managing these stock levels to balance the costs of holding inventory against the risks of stock-outs. Decoupling, a strategic objective in inventory management...