Types of inventories of material and technical resources and factors determining their value
1.3 Factors influencing the amount of reserves
Magnitude inventory and turnover depend on many factors. Some of these factors accelerate commodity turnover and thereby objectively reduce the required amount of inventory, while others, on the contrary, slow down the speed of commodity circulation and thereby increase the size of inventory. Knowing this, it is possible to identify reserves for accelerating the turnover of an enterprise's inventories; improve the supply of consumer goods to the population; reduce the cost of education and inventory maintenance.
Conventionally, all factors can be divided into external, which do not depend on the activities of the enterprise, and internal, which have a significant impact on inventory, depending on the operation of the enterprise. The combination of all factors can be presented in the form of a diagram (Fig. 1.2).
The main factors influencing turnover and inventory levels include the following.
1. The relationship between demand and supply of goods. In conditions when the population's demand exceeds the supply of goods, their turnover sharply accelerates. And as the market becomes saturated and the supply of goods increases, there is a slight slowdown in the speed of circulation of goods. One of the conditions contributing to the normalization of inventory is studying consumer demand, influencing suppliers to expand the range and improve the quality of goods.
the relationship between demand and volume of retail turnover;
and offer; complexity of the assortment;
saturation commodity markets; organization and frequency of delivery of goods
product distribution links; ditch;
volume of imports; condition of material and technical
the price level for specific current bases and fixed assets of trade
vars; of the new enterprise
physical and chemical properties
Rice. 1.2 - Factors influencing the amount of inventory
2. Volume of retail trade turnover. Trading enterprises with a large volume of trade turnover are characterized, other things being equal, by the presence of a large amount of inventory and accelerated turnover. The greater the volume of trade turnover, the greater the one-day turnover, and, consequently, the size of inventory. The accelerated turnover is explained by the fact that in such stores goods are delivered more often, often bypassing intermediaries.
3. Complexity of the product range. The size of inventory is also determined by the breadth and renewal of the product range. The larger the assortment, the more inventory. The circulation time of goods of a complex assortment, as a rule, exceeds the circulation time of goods of a simple assortment. For goods of a complex assortment, inventory is created according to various characteristics. So, in a store that sells a complex range of goods, for example, sewing products, there must always be a wide selection of clothes in sizes, heights, styles, fabric colors, etc., they must be sorted and prepared for sale. And these operations require a certain time and the creation of additional reserves.
4. Consumer and physical and chemical properties of goods. They limit or lengthen turnaround time. For shelf-stable goods, large inventories of complex assortment, long-lasting, and non-perishable goods are created. food products. Due to their physical and chemical properties, individual goods are not subject to shelf life, but rather to a sales period limited to a few hours. Large inventories cannot be created for such goods.
5. Organization and frequency of delivery of goods. The more often goods are delivered to stores, the smaller inventories can be used to fulfill the turnover plan. In turn, the frequency of delivery depends on the location of trading enterprises, transportation conditions, and the location of production enterprises. For example, the time for delivery of goods to the Far North, high mountainous and remote areas may be limited due to natural conditions and transportation difficulties. Naturally, in these areas the circulation time of goods is much longer than in others. The closer they are located industrial enterprises or wholesale bases to areas of consumption, the less time is spent on their delivery. A high frequency of delivery is typical for perishable goods.
6. The state of the material and technical base and fixed assets of the trading enterprise. Availability of a developed network equipped modern equipment for storing goods, in a trading enterprise allows you to create them wide range, ensuring safety and quality.
The turnover of goods is also influenced by a number of other factors: the saturation of commodity markets, the level of commodity circulation, import volumes, the distribution of inventories of goods between wholesale and retail trade links, the price level for specific goods and product groups, the organization of advertising and sales of goods, the organization of labor, personnel qualifications and the level of management of the trade and technological process, etc.
Changes in these factors can affect the amount of inventory and turnover, improving or worsening these indicators.
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24.Effective inventory management as a factor in enterprise profit growth
Inventory management policy – part of the overall policy for managing current assets of an enterprise, which consists of optimizing the overall size and structure of inventories of goods and materials, minimizing the costs of their maintenance and ensuring effective control over their movement.
Purpose of inventory management is to develop policies by which optimal investment in inventories can be achieved. Good inventory management minimizes inventory volume, reducing inventory-related costs and increasing return on assets.
Inventory management policy represents part of the general policy of managing current assets of an enterprise, which consists in optimizing the overall size and structure of inventory inventories, minimizing the costs of their maintenance and ensuring effective control over their movement.
The development of an inventory management policy covers a number of sequential stages of work, the main of which are:
Analysis of inventory inventories in the previous period . The main objective of this analysis is to identify the level of production and sales of products with appropriate inventories in the previous period and assess the effectiveness of their use. The analysis is carried out in the context of the main types of reserves.
Determining inventory formation goals . Goals can be:
ensuring current production activities (current stocks of raw materials and supplies);
ensuring current sales activities (current inventories finished products);
accumulation of seasonal reserves to ensure the economic process in the coming period
Optimizing the size of the main groups of current inventories . For this purpose, a number of models are used, among which the most widely used is the “Economically justified order size model”. It can be used both to optimize the size of production inventories and finished product inventories. The calculation mechanism of this model is based on optimizing the total operating costs for the purchase and storage of inventories at the enterprise. These operating costs are pre-divided into two groups:
a) the amount of costs for placing orders (including costs of transportation and acceptance of goods)
health protection- the amount of operating costs for placing orders; Srz- average cost of placing one order; AKI– volume of industrial consumption of goods in the period under review; RPP – medium size one shipment of goods.
From the above formula it is clear that with a constant volume of production consumption and the average cost of placing one order, the total amount of operating costs for placing orders is minimized with an increase in the average size of one shipment of goods.
b) the amount of costs for storing goods in a warehouse.
OZhT- the amount of operating costs for storing goods in a warehouse; Cx- the cost of storing a unit of goods in the period under review.
From the above formula it is clear that with a constant cost of storing a unit of goods in the period under review, the total amount of operating costs for storing inventory in a warehouse is minimized by reducing the average size of one shipment of goods.
Thus, with an increase in the average size of one shipment of goods, the amount of operating costs for placing orders decreases and the amount of operating costs for storing goods in a warehouse increases. This model allows you to optimize the proportions between these two groups of costs so that their total amount is minimal. The model is expressed by the formula:
RPPo- optimal average batch size for delivery of goods.
The optimal average size of production inventory is determined by the formula:
For finished product inventories, the calculation of indicators is similar.
The required amount of financial resources advanced for the formation of inventories of goods and materials is determined by the formula:
FSZ = SR NC - SC
FSZ– the amount of financial resources advanced to inventories, SR– average daily volume of inventory consumption, NZ– stock storage standard in days, short circuit– the average amount of accounts payable for the transformation of inventory items.
The calculation is carried out for each type of inventory. Summing up the calculation results allows us to obtain an indicator of the total need for financial resources advanced for the formation of reserves, i.e. determine the size of current assets serving this stage of the production cycle.
Minimizing the current costs of servicing inventories is an optimization problem that is solved in the process of their rationing.
Calculation optimal size delivery batch, at which the minimum total of current costs for servicing inventories is economically justified quantity of stock (EOQ) method allows you to determine which size should be ordered
F– costs of placing and fulfilling one order, D– annual demand for reserves in units, H– costs of storing a unit of production inventory in rubles.
This model is based on the following assumptions: annual inventory requirements can be accurately forecast; sales volume is evenly distributed throughout the year; There are no delays in receiving orders.
Widespread inventory management system - ABC – dividing the entire set of inventories into 3 categories, based on their cost, volume, frequency of consumption in the production process and negative consequences on the final results of the enterprise.
The ABC method allows you to focus on controlling the most important types of inventory (A and B), and thereby save time, resources and increase management efficiency. The ABC proportion is considered optimal: 75% - 20% - 5%.
The choice of inventory management policy practically consists of answering the question: “what amount of inventory is optimal for the organization?”
Both direct and more general criteria, as well as their various combinations, can be used as basic indicators of the quality of the selected inventory management policy.
indicators of inventory sufficiency to meet customer demand
indicators based on the search for the optimal order size, based on the ratio of the cost of storing inventory and the cost of order fulfillment
indicators related to the characteristics of cash flows from operations for the purchase and sale of goods
indicators reflecting the profitability of an enterprise under various inventory management methods.
Let's consider the factors influencing inventory management.
Seasonality of production. If the average annual production level is calculated based on maximum efficiency utilization of production capacity, this may cause the accumulation of excessive stocks of finished products in the manufacturer’s warehouses in certain periods, especially in seasonal business. For example, Christmas tree decorations are accumulated at the factory long before they are sold.
However, if the seasonal nature of the business is taken into account when calculating the average annual production level, then this eliminates the problem of excessive inventories, but the problem of unused production capacity during the quiet period arises. Moreover, if a firm maximizes its production activities to meet seasonal needs, she will be forced to pay overtime and experience other negative consequences, such as excessive use of equipment. So we have the classic problem financial analysis: Is the cost reduction from increased production volume sufficient to justify excessive inventory holding costs?
For example, a proposal to increase production levels is being considered. At the same time, operating costs are reduced by 300 thousand rubles, but investments in inventories increase by 900 thousand rubles. As a result, the return on investment will be 33% (300: 900).
If the required rate of return is 10%, then it is obvious that the proposed option can be accepted.
Inflation (and deflation). Prices are changeable; they not only rise, but also fall. World experience testifies to this. Only a very astute purchasing manager can hope for his company to prosper in such an unstable environment. Part of the problem is controlled by maintaining moderate inventory levels. Another way is to hedge price risk, i.e. the use of futures contracts that provide for the sale of a commodity at a fixed price within a specified period. But this only applies to goods traded on commodity exchanges.
It is also necessary to remember the influence of the method of inventory valuation used by the company. So, using the method FIFO (first in - first out) increases the valuation of reserves, and the method LIFO (last in - first out) - reduces. This influence is especially sensitive during periods of high inflation.
Optimal inventory level
Firms are able to stimulate sales by maintaining large inventories, but the associated costs rise. Task financial manager- determine what level of inventory provides the company with the greatest profit. And first of all, you need to estimate the costs that are associated with inventories.
There are two types of costs: current costs and order costs.
Current costs caused by inventory storage operations: rent storage facilities, insurance, security, etc. They are usually expressed as a specific value. For example, storing 1 ton of metal in a warehouse costs so many rubles per year.
If we assume that the current cost per unit of inventory is a constant value, then current cost = · C, where is the average stock value; C- specific current costs.
Order costs. They arise whenever an order is placed for the supply of any raw materials or supplies (as well as purchased goods and semi-finished products) and can be clerical and telephone
expenses, remuneration of supply department employees, etc. These costs can be classified as constant, independent of the size of the order. They are usually expressed in cost form per order (for example, 500 rubles per order).
If we reduce the role of a financial manager to minimizing two types of costs, then this greatly simplifies the problem, since their changing trends are opposite. Thus, an increase in inventory levels causes an increase in operating costs, while reducing ordering costs as the number of these orders decreases.
Firms that have no inventory keep operating costs to zero, but must place orders for materials whenever those materials are needed to carry out production. This way they maximize the cost per order. Conversely, a firm can minimize ordering costs by placing just one order for all materials at once, but its operating costs due to holding huge inventories will be very high.
The problem can be solved if large amounts of inventory contribute to increased sales. It is known that the more inventory is displayed, the greater the likelihood of finding a buyer. But the more inventory of finished goods that is not on display for potential buyers, the less goods can be sold due to the lack of, for example, the right size or models. However, it is not a fact that the level of inventory that provides greater revenue and lower costs is optimal.
To determine the optimal amount, it is necessary to find a balance between costs and profits at different inventory levels.
Since order costs are a constant value, they are determined by the formula order costs = , where S- total consumption of reserves (demand); Q- order quantity; P- costs of fulfilling one order.
There is an inverse relationship between the two types of costs: the larger the order quantity, the higher the operating costs, but the lower the order costs. Therefore, it is necessary to find the order quantity at which the total costs will be minimal. This will be the optimal order quantity.
There is an entire branch of operations research devoted to this topic. Scientists have developed a number of models, among which the most popular is the economically justified order size model. Under certain fairly reasonable assumptions, this model uses the formula:
Assumptions: the level of inventory utilization is constant; The execution time for each order is agreed upon; The delivery date coincides with the point when inventory levels reach zero. This does not apply to the stockout problem, which occurs when a firm runs out of stock of an item and cannot buy or supply it. Relaxing these assumptions does not cause significant changes in the calculations.
Economical order size ( EOQ) is the quantity (volume, size) that is most profitable to order. Let's calculate this value, convert it to the average inventory level and determine the minimum amount of total costs (current and per order) using the following example.
The monthly requirement for components is 500 pcs. at a price of 100 rubles. The costs associated with placing and receiving an order are 300 rubles. The current cost of maintaining one component part is 30% of its price. It is necessary to determine how many parts should be ordered at a time:
The optimal order size is 100 pcs. components. Given the assumptions, we can determine that the average inventory size is 50 pieces. ( EOQ/ 2). During each month, the order must be repeated 5 times (500: 100), i.e. every 6 days (30:5). You can also calculate the cost:
current costs = average monthly inventory in pcs. · specific current costs = · 30 = 1,500 rubles;
cost per order per month = · 300 = 1,500 rub.
Total costs for maintaining inventory: 1,500 + 1,500 = 3,000 rubles.
This minimum costs for the maintenance of inventories, which are due to an order of 100 pieces, repeated 5 times during the month. Any other order size will have higher costs.
More detailed and complete model EOQ covered in courses production management and logistics.
The main reasons for the reduction of inventories (the negative role of inventories)
The main reason prompting enterprises to reduce inventories is the costs associated with their storage, which for the year amount, as noted in § 17.1, to approximately 25% of the value of the inventory.
Let's consider what types of costs can be reduced by reducing inventories.
Reducing inventory allows you to reduce losses from death in inventory cash. Investing money in reserves means withdrawing them from alternative projects and, accordingly, losing profit from the implementation of these projects. The amount of lost profit is assessed by the rate of efficiency of cash investments in working capital. The lower limit of this norm can, for example, be considered the Sberbank interest rate on household deposits. Obviously, the size of losses from the death of funds will be directly proportional to the size of the reserve. Moreover, the coefficient of proportionality is the capital efficiency rate.
Reducing inventories allows you to reduce the cost of maintaining specially equipped premises - warehouses. Storage of products requires the creation of appropriate conditions.
For this purpose, warehouses are created, which, as a rule, are buildings or premises equipped with everything necessary equipment. The costs of maintaining a warehouse include depreciation on its cost, as well as expenses such as heating, security, electricity, etc.
Reducing inventories allows you to reduce labor costs for warehouse personnel: administrative and managerial workers, storekeepers, warehouse drivers vehicles, loaders, forwarders, etc.
Reducing inventory allows you to reduce losses from deterioration consumer qualities products. Storage of products is often accompanied by a change in their consumer qualities, either due to ongoing physical and chemical processes, or due to obsolescence of the product. Obsolescence leads to depreciation and, accordingly, to costs.
Physico-chemical processes that occur with products during storage can sometimes increase their cost. For example, when certain types of wine are stored, their quality increases. However, most often the physical and chemical changes that occur during storage lead to a decrease in the consumer qualities of the product and, accordingly, to costs that will be directly proportional to the size of the inventory.
Reducing inventories allows you to reduce losses caused by the risk of theft, fires, and natural disasters. The cost of risk in monetary terms can be assessed:
- o through insurance costs;
- o through the tariffs and rates of insurance companies.
As you know, the best protection against theft is the absence of products. It is obvious that losses caused by the risk of theft, fires, and natural disasters are directly proportional to the size of reserves.
The main reasons for creating inventories (the positive role of inventories)
Let's consider the main reasons that guide entrepreneurs when creating inventories.
Increasing inventory leads to increased ability to serve customers immediately. You can complete a customer order in one of the following ways:
- o on manufacturing plant- produce the ordered goods;
- o at a trading enterprise - purchase the ordered goods;
- o in both manufacturing and commercial enterprises - issue the ordered goods immediately from the available stock.
The last method is, as a rule, the most expensive, since it requires maintaining a reserve. However, in a competitive environment, the ability to immediately satisfy an order can be decisive in the fight for the consumer.
Thus, a decrease in inventory may lead to losses due to decreased sales.
Increasing inventory leads to lower costs associated with placing orders.
An increase in inventory leads to a decrease in the number of orders, as orders are placed less frequently but become larger. A reduction in the number of orders, in turn, leads to a reduction in the costs associated with placing them.
Each order sent to a supplier is associated with certain costs. It is necessary to make a decision about sending an order, then place an order, make the appropriate payments, monitor the supplier’s compliance with the terms of the contract for this order, accept the goods, and possibly file a claim upon completion of the order. The above list of works, which is not complete, indicates that an increase in the number of orders increases the labor costs of employees of the supply department, warehouse, accounting, and other departments of the enterprise. An increase in labor costs entails an increase in the number of employees with a corresponding increase wages. The need for office space and equipment is increasing, which also increases costs.
Paper consumption, phone calls and email costs increase. The list of types of costs that increase with an increase in the number of orders can be continued.
Thus, an increase in inventory leads to a decrease in the costs associated with placing orders.
Increasing inventories leads to lower costs associated with product delivery.
Increasing the size of the delivered consignment of goods in some cases makes it possible to switch from small-tonnage road transport to large-tonnage or railway, which, in turn, reduces the total transport costs per unit of time. For example, an enterprise wholesale trade The sales plan for copier paper has been set at 16,000 packages per month. Delivery can be carried out by wagon - one wagon per month, or by car - two cars per month. Using a wagon allows you to save on delivery, but doubles the average stock in the warehouse.
Thus, increasing inventory can lead to lower transportation costs.
Increasing inventories (sales) allows you to reduce costs associated with the production of a unit of product. Products can be produced in small batches as demand arises. Then the inventories will be small, but constant production readjustments will place a burden on the unit cost of the product. Another way is to release one large batch and keep finished product in sales stock. In this case, the costs associated with launching a product into production will be spread over a large number of products, which can reduce the unit cost even with increased inventory.
Thus, increasing the sales inventory by increasing the size of the produced batch of products reduces the cost of their production.
An increase in inventories increases the enterprise's ability to withstand violations of the established delivery schedule (unpredictable decrease in the intensity of the input material flow). We are talking about a safety stock, which is created so that in the event of a delay in deliveries, the production or trading process does not stop.
Thus, an increase in inventory leads to a reduction in the risk of losses from production stoppages or lack of goods in trade.
Increasing inventories increases the company's ability to withstand fluctuations in demand(unpredictable decrease in the intensity of the output material flow). We are also talking about safety stock. Demand for a product is subject to fluctuations that cannot always be accurately predicted. Therefore, if you do not have a sufficient safety stock, a situation cannot be ruled out when effective demand will not be satisfied, i.e. the entrepreneur risks being left without the goods at the moment of demand and letting the client go with money and without a purchase.
The creation of reserves is necessary due to the seasonal nature of the production or consumption of certain types of goods, as well as the seasonal nature of transportation.
The seasonal nature of production, for example, has products agriculture. Thus, the potato harvest in Russia is harvested in early autumn. The flows of this root crop go along commodity distribution chains all year round. Therefore, the stock must accumulate somewhere.
An example of the seasonal nature of consumption is school goods, the demand for which increases sharply at the end of August. Stocks of school notebooks in commodity distribution systems, in this regard, can accumulate as early as January.
In Russia, transportation has a pronounced seasonal nature in the regions Far North. The stock of goods created in this region in the summer is practically the only source turnover coverage for trade organizations.
Increasing inventories allows you to make a profit by playing on the difference in market prices, i.e. through speculation. The price of some goods in the market may increase. An enterprise that was able to foresee this growth creates a reserve in order to make a profit due to changes in market prices.
Discounts for purchasing large quantities of goods may also cause stockpiling. Let's say, having stable sales of 400 units of goods per month, a wholesale trade enterprise purchased goods from the supplier in batches of 200 units (once every two weeks). The next batch was delivered after the previous one was completely consumed. Average stock, obviously, was equal to 100 units. One day, a supplier offered, and the company agreed to purchase and deliver goods in batches of 1,200 units, subject to a significant discount on the price. The stock increased to 600 units.
A decrease in stock in this case leads to a loss of supplier discounts.
Increasing inventories allows you to reduce losses from production downtime resulting from a lack of spare parts. Planned preventive maintenance of equipment, as a rule, is carried out according to schedules, in accordance with which the necessary spare parts are procured. However, in addition to planned repairs, accidents and unexpected equipment breakdowns may occur. Lack of parts inventory in this situation will result in a shutdown. production process. This is especially important for enterprises with a continuous production process, since in this case stopping production can be too expensive.
Thus, increasing the stock of spare parts reduces the risk of losses from production stoppages.
Increasing inventory allows you to simplify the management of the production or trading process. The creation of reserves both in production and in trade makes it possible to reduce the requirements for the degree of consistency in the chain of production sites or between the links of product distribution and, accordingly, reduce the costs of organizing the management of these objects.
The listed reasons indicate that entrepreneurs in both trade and industry are forced to create inventories, since otherwise losses and costs arise that reduce profits. However, an increase in inventories leads to an increase in other types of costs (see § 17.3), which also reduces profits.
The level of inventory at the enterprise should be selected so that the total costs and losses for all items are minimal, i.e. profit is maximum.
Factors of economic growth are economic components that influence the quality and rationality of the scale of increased production. The pace, volume and efficiency of actual production depend on these factors.
All factors can be divided into two large groups, depending on the method of exposure: direct and indirect.
Direct factors or supply factors determine the physical possibility of economic growth. These factors are potential resources that influence economic growth through their quantity and quality, thereby offering support for economic development.
Direct factors include:
- Labor resources– the human component, based on the level of education, training and discipline of personnel. One of the non-price factors of demand. Depends on the population (the basis of China's industry) and the level of education (qualified personnel in Belarus create a significant difference in the country's GDP with its post-socialist neighbors).
- Natural, mineral and fuel and energy resources– limited resource base, diverse supply market, in most cases assessing the factor of economic growth of the state. There are exceptions to the rules, countries are poor in resources, but with high level economic growth, for example Japan.
- Volume of basic capital– the main financial resource aimed at faster and higher-quality economic growth. The monetary resource is most closely related to the political component, but it is also most dependent on other direct resources.
- Level of technology development- an integral factor of production, like money and labor, is based on the political and financial state of the state and depends on other growth factors. The factor of technological development is clearly expressed in the example of the USSR in 1920-30, with an increase in production volumes aimed at modernization.
- Organization of production– the ability to choose the most profitable of many solutions, the ability to conduct the economy most effectively. Entrepreneurial talent is needed for rational and timely use of other resources. The use of labor, natural and financial resources for maximum economic growth and increasing the economic efficiency of production depends on the entrepreneurship factor.
All direct factors are goods on the supply market, opportunities that require demand to be used - indirect factors. Demand factors or indirect factors determine the ability to realize resources to improve economic growth. These factors are the result of profitable capital and its use. From correct use With the increased capital, the demand for goods rises to the level of supply, creating an ideal situation in the resource market.
Demand factors include:
- Degree of market monopolization– the problem of macroeconomics and absolute market control is expressed in the form of a monopoly.
- Tax climate in the state is extremely influential in producing on a large scale.
- Development of the credit and banking system– advantage for large-scale economic growth.
- Reduce costs– a way to increase investment in production without significant waste and harm to the general economic fund.
- Foreign trade– the ability to export, re-export or import resources to maintain the balance of supply factors.
- Systematization of expenses– a unified system aimed at the most profitable use of demand factors and the highest quality and fastest economic growth.
There are also two global factors that characterize economic growth as a whole:
- Extensive factor– increasing the level of production by increasing the amount of labor, land and financial resources. Average productivity remains the same, but quantity increases. The factor is based on conservative production systems and rejects quality improvements, focusing on quantity. The biggest disadvantage of the factor is the possibility of excess labor, which subsequently leads to a decrease in productivity.
- Intensive factor– maximum modernization of unchanged production volumes. The quality of labor and technological resources is improving to obtain maximum profit from the existing mineral potential. The factor is typical for states that are poor in mineral resources, but with a highly qualified workforce and an appropriate level of technology.
Both factors are economically beneficial depending on the potential type of resource and can increase economic growth many times over.
The most effective and rapid temporary economic growth can be achieved with sufficient labor, natural and financial potential, as well as with its most rational use.
