The procurement department of 自存倉 must know when the time is right for ordering inventory. Do not let when the production process of inventory that is needed has run out so the production process is stopped. If the production process is stopped, the company cannot meet market needs and this can cause losses to the company itself. When a company is unable to meet market demand, other companies will enter the relevant market to meet the needs of consumers with the same product. To prevent this, before the inventory runs out the company must provide the amount needed for the previous production process. The next calculation regarding inventory is how much inventory will be stored in the warehouse. Given that too much inventory storage in the warehouse will cause losses, it is very important for the company to regulate how much inventory will be stored in the warehouse so as not to cause large losses.
Inventory purchased by the company is of course used for the production process, inventory management, in this case, is certainly very necessary in order to produce the expected output. Companies also have several reasons why they have to produce. Inventory management is the main part of manufacturing companies or industries, such as factories, the profits obtained are from the process of production of goods carried out continuously. If the production process is stopped, the company will find it difficult to fulfill the remuneration for its employees. There are many ways that can be done for the inventory management process, management can be done into semi-finished goods to become finished goods that are ready for sale in the market.
Inventory management is also closely related to some of the costs that must be incurred by the company relating to the inventory. The cost of storing this inventory includes a number of things including maintenance costs of goods in the warehouse, warehouse rental costs, taxes, and insurance as well as capital costs invested in the inventory. The cost of storing goods inventory can be measured by a certain percentage of the average inventory value and based on the unit cost of the stored inventory.