The Inventory Management Program and Control Technique (IMPACT) is a way to maintain the stock keeping items at desired levels, whether they be raw materials, goods in progress, or finished goods.

Inventory Management and Control is a scientific method of determining-

1. What to purchase

2. When to purchase

3. How much to be kept as stock for a given period of time

Efficient inventory management and control means—never falling short of anything, never overstocking of anything and never dispatching too many small orders too often.

Functions of inventory management and control:

1. To ensure a balanced supply of materials and components.

2. To avoid stock out situation i.e. complete exhaustion of the inventory, otherwise it may disrupt the production.

3. To avoid excess locking up of the items in storage

4. To keep a proper record of inventory

5. To act as an insurance against errors in forecasting

6. To reduce thefts and misplacements of the material

7. To maintain proper inventoryinformation system in the organization

8. To keep working capital blockage at a minimum level of opportunity cost

9. To avoid the devaluation of the material

10. To prevent the obsolesce of design and technology

11. To gain economies in purchasing, for example—discount ordering, bulk ordering should be done to reduce the purchasing costs

12. The check the pilferage, spoilage and damage of inventory.

13. To reduce the material handling costs, by using carry vans, frank lifts and conveyor belts

14. To gain the economies of production (by reducing the idling time of labor and machinery)

15. To check the insurance, taxes and other payable bills of inventory

Objectives of inventory management and control:

1. Minimizing the idling time of man and machinery

2. To provide smooth and optimal services to the customers

3. To keep the carrying cost at minimum level

4. To keep the blockage of working capital at minimum level

Techniques of inventory management and control:

Two major techniques of inventory management and control are “fixed order quantity” and “fixed order inventory”. Fixed order quantity is also known as “Q” system of regulation or two bin system of regulation. Under this technique quantity to be ordered is fixed but time period varies. Fixed order inventory is also known as “P” system of regulation or periodic review mechanism. Under this technique quantity to be ordered varies but time period of ordering is fixed. These techniques help organizations to keep their inventories at optimum level.