Materials used in small businesses may include: raw materials (unprocessed materials), work-in-progress process (semi-processed materials), or finished goods (completed goods). The success of a small business is also determined by the effectiveness of how any or all of these materials are managed. This is because effective material management will reduce cost for the business while at the same time providing satisfaction for the customer.
The objective of Material management or inventory control is to minimize cost, which will improve profitability. Small businesses should adopt a suitable inventory control system to cover different aspects of cost associated with materials which may include: carrying cost, holding cost, actual cost of stocks and total costs.
One principle that business should bear in mind is that excessive stocks should not be kept so that the cost of storage will not add to the total cost. Also, shortage of stock should be avoided in order to meet the demand of customers.
Material management in small businesses also involves providing for the right type of material for production so that customers demand can be met promptly and effectively.
The objective of Material management or inventory control is to minimize cost, which will improve profitability. Small businesses should adopt a suitable inventory control system to cover different aspects of cost associated with materials which may include: carrying cost, holding cost, actual cost of stocks and total costs.
One principle that business should bear in mind is that excessive stocks should not be kept so that the cost of storage will not add to the total cost. Also, shortage of stock should be avoided in order to meet the demand of customers.
Material management in small businesses also involves providing for the right type of material for production so that customers demand can be met promptly and effectively.
A lovely post I must say
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