Financial manager''s role in inventory management, Managerial Accounting

Financial manager's role in inventory management

The techniques of inventory management are very useful in determining the optimum level of inventory and finding answers to the problems of the economic order quantity, the re-order point and the protection stock. The methods are very essential to economies the use of resources by minimizing the total inventory cost. Although out treatment of inventory management has been simple, it indicates the broad framework of managing inventories. Many sophisticated techniques have been evolved to handle inventory management problems more efficiently and effectively and the improvements are still continuing. For the majority of the companies, inventory represents a substantial investment. Thus, the goal of the wealth maximization is related to the efficiency with which inventory is managed. Consequently, the financial manager has an important role to play in the management of inventory, although it is not his operating responsibility to control inventory. The financial manager should see that only an optimum amount is invested in inventory. He must be familiar with the inventory control methods and ensure that inventory is managed well. He must introduce the policies that reduce the lead time, regulate usage and therefore, minimize safety stock. The total effect would be to decrease inventory investment and increase the firm's prospects of making more profits.

Posted Date: 12/6/2012 7:17:59 AM | Location : United States







Related Discussions:- Financial manager''s role in inventory management, Assignment Help, Ask Question on Financial manager''s role in inventory management, Get Answer, Expert's Help, Financial manager''s role in inventory management Discussions

Write discussion on Financial manager''s role in inventory management
Your posts are moderated
Related Questions
What are the Objectives of Intra company transfer pricing The objectives of Intra company transfer pricing are: 1) Evolution of performance and efficiency of each division.


What is the objective of performance budgeting The objectives of performance budgets is to provide a closer linkage between planning and action and also to provide a common bas

Features of product life cycle costing Product life cycle costing is important due to the following features: 1) product life cycle costing involves tracing of costs and re

Imposed Budgets In this approach to budgeting, top management prepares a budget with little or no help from operating personnel, which is then obligatory upon the employees who

Problem From the following data, calculate overhead variances of following: (a) Variable overhead expenditure variance (b) Fixed overhead expenditure variance (c) Total ov

JIT and Management Accounting Management accountants in many organizations have been criticized because of their failure to change their managing accounting system to reflect

The management of Popular Stores Sdn. Bhd. are in the process of exploring the company’s investment opportunities.

Operating Cycle Method In this way, total operating expenses for a period are divided via the number of operating cycles in the relevant period to compute the cash need for wor

Explain the categories of The activity cost drivers The activity cost drivers can broadly be classified into following three categories: 1) Transaction drivers: for exampl