NCEA L2Acc - Introduction to Inventory Management

Inventory

• Products that are completely made and ready to be sold to customers.
• Physically counting all the items a business has in stock to make sure the records are correct.
• All the items or products a business has on hand, which they use to make money by selling them or using them to create something.
• A way of keeping track of inventory continuously by updating records every time something is added or taken out.

Raw Materials

• Items that are currently being made but aren't finished yet. Think of half-built cars in a car factory.
• The basic stuff used to make products. For example, wood is a raw material for making furniture.
• Having too much of a product, more than what is needed or can be sold in a reasonable time.
• All the items or products a business has on hand, which they use to make money by selling them or using them to create something.

Work-in-Progress (WIP)

• The basic stuff used to make products. For example, wood is a raw material for making furniture.
• Items that are currently being made but aren't finished yet. Think of half-built cars in a car factory.
• A document that a business sends to a supplier to order more products or materials they need.
• A method of managing inventory where the newest items (the last ones in) are sold or used first.

Finished Goods

• When a business receives new products or materials, they get a document confirming what was delivered.
• When a business takes items out of inventory to use them or sell them, they make a record of it, called an issue.
• Products that are completely made and ready to be sold to customers.
• A measurement of how often a business sells and replaces its inventory over a certain time period.

Inventory Records

• A list that keeps track of all the products a business has, where they are, and how many there are.
• Physically counting all the items a business has in stock to make sure the records are correct.
• The level of inventory at which a business knows it needs to order more stock to avoid running out.
• All the items or products a business has on hand, which they use to make money by selling them or using them to create something.

Purchase Orders

• The level of inventory at which a business knows it needs to order more stock to avoid running out.
• When a business runs out of a product that customers want to buy.
• A document that a business sends to a supplier to order more products or materials they need.
• A method of managing inventory where the newest items (the last ones in) are sold or used first.

Receipts

• When a business receives new products or materials, they get a document confirming what was delivered.
• A method of managing inventory where the oldest items (the first ones in) are sold or used first.
• A way of keeping track of inventory continuously by updating records every time something is added or taken out.
• Having too much of a product, more than what is needed or can be sold in a reasonable time.

Issues

• When a customer orders something that is not currently in stock, and they have to wait until it’s available again.
• When a business takes items out of inventory to use them or sell them, they make a record of it, called an issue.
• A document that a business sends to a supplier to order more products or materials they need.
• A measurement of how often a business sells and replaces its inventory over a certain time period.

Reorder Point

• When a business runs out of a product that customers want to buy.
• The level of inventory at which a business knows it needs to order more stock to avoid running out.
• A list that keeps track of all the products a business has, where they are, and how many there are.
• When a customer orders something that is not currently in stock, and they have to wait until it’s available again.

Inventory Turnover

• A measurement of how often a business sells and replaces its inventory over a certain time period.
• Physically counting all the items a business has in stock to make sure the records are correct.
• When a business receives new products or materials, they get a document confirming what was delivered.
• Items that are currently being made but aren't finished yet. Think of half-built cars in a car factory.