Excel Spreadsheet For Inventory Management– Inventory management seeks coordination and efficiency in the management of the materials needed for the activity.
Before defining the inventory management we will define cost accounting, which is a branch of accounting that are dedicated to analyze, determine and control the costs incurred by an organization.
Definition of inventory management
Inventory management is included within the cost accounting branch and defined as proper administration of the record, purchase and exit of inventory within the company.
A company usually maintains a minimum number of stocks to cope with increases in demand, just as it also has to have the material needed to continue production and that there is no pause in the activity.
Types of Inventories
There may be different types of inventories such as raw materials, finished products, etc.
For the management of inventories the methods are usually used:
- System ABC
- Economic order quantity
- Valuation of Stock Exit
There are a number of methods for calculating the final cost of output from inventories.
- FIFO: First in First Out. The first existence to enter, the first to come out. It means that stocks are valued at their exit, at the cost price of the first stock in the warehouse, ie stocks are valued at the oldest cost price
- LIFO: last in first out. The last existence to enter, the first to leave. Inventories are valued at the most current cost price, at the last stock entered into the inventory
- PMP: Weighted average price. The cost price is the weighted average of the various entry prices