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Raw Material 2. Work-In-Progress 3. Finished Goods

The document discusses inventory management for manufacturing companies, which involves forecasting production and sales to manage raw materials, work-in-progress, and finished goods inventories, and how inventory management must support company strategy and adapt to changing market demands.

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uttamsudhir
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47 views

Raw Material 2. Work-In-Progress 3. Finished Goods

The document discusses inventory management for manufacturing companies, which involves forecasting production and sales to manage raw materials, work-in-progress, and finished goods inventories, and how inventory management must support company strategy and adapt to changing market demands.

Uploaded by

uttamsudhir
Copyright
© © All Rights Reserved
Available Formats
Download as PDF, TXT or read online on Scribd
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Page 7

Operating cycle:
For a manufacturing company like; steel industry; cement industry and many other
manufacturing companies, Inventory management is the most crucial part for the
organization.

Inventories which may classified as:
1. Raw material
2. Work-in-progress
3. Finished goods



Whereas receivable and cash management can be done after sales but inventory
management must be done before sale. It requires appropriate forecasting of production
and sales. As it is based on forecasting, so it becomes difficult task for any financial
manager for any organization.

Inventory Management must be designed to meet the dictates of market place and support
the companys Strategic Plan. The many changes in the market demand, new opportunities
due to worldwide marketing, global sourcing of materials and new manufacturing
technology means many companies need to change their Inventory Management approach
and change the process for Inventory Control.

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