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What are the four functions of inventory?

What are the four functions of inventory?

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This question is part of OM 301 FINAL INVENTORY MANAGEMENT and COMPUSEARCH SLIDES
Asked by Bcorazza, Last updated: Jul 07, 2020

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Chris Kenway

Chris Kenway, Content Writer, Jacksonville

Answered Jan 04, 2019

The four functions of inventory are to separate the various parts of the production process, protect against stockouts and backouts, take advantage of quantity discounts, and hedge against inflation. These functions are all important, but the most important one is hard to pin.

That’s because the overall function, and arguably the most important function of inventory, is to provide a business with the supplies it needs to be successful. So, if you separate the parts of the production process to make sure everything runs smoothly, that’s the job of the inventory management to make happen.

While inventory itself has a role, the ones who make it happen are the inventory management people. Without them, there is no way inventory will be able to fulfill its role properly.

 

bcorazza

Bcorazza

Answered Sep 22, 2017

Separate various parts of the production process 2. protect against stockouts and backorders 3. take advantage of quantity discounts 4. hedge against inflation
 

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