Aggregate Stock

simms_aggregateInventory

Aggregate Stock is the total volume of multiple classifications of goods contained within a storage facility. The inventory may contain finished goods, raw materials and components. It is also called aggregate inventory. The purpose of aggregate stock is to establish overall levels of inventory that you desire and then applying controls to guarantee that decisions are made so that materials replenishment achieves the goals of the company.

The following goals must be in effect when Aggregate Stock methods are to be used:

• Assess investment levels of the whole company and set targets for improvement

• Develop accountability and link aggregate inventory management controls

• Employ specific techniques like ABC analysis, control parameters and input-output controls

• Measure performance against your own record and against that of your competition

• Pinpoint the drivers of inventory investment levels and then control them.

Most managers have employees making stock that has no immediate demand, they need to produce materials that will earn profits. They may use resources that could better be used for more immediate and profitable needs. Proper deployment of stock can create liabilities. Excess of goods in one place usually means that other places experience a drought. All of these challenges can be overcome by accurate analysis and proper practical planning.

Stock management must establish the lowest level of inventory consistent in balance with achieving the company’s objectives. An excess of stock reduces your Return on Investment and Return on Assets, causing a lower profit margin. Concurrently, it also increases expenses from damage, handling, insurance, interest payments, loss, management, obsolescence, storage tracking and taxes. Aggregate Stock Analysis can maximize inventory levels within the parameters defined by costs, investment objectives, logistics, processes and services.

Whether you use Aggregate Stock in your business or rely on older and slower methods, SIMMS Inventory Management software can help you master your accounting and inventory management needs. Visit www.simmssoftware.com or email sales@kcsi.ca for more information.

3 thoughts on “Aggregate Stock”

Comments are closed.