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Introduction:

This time we decided to do our work about milka.
Chapter 12, the inventories, has been our choice, we are going to talk about different points, and these are the ones; classification of inventories, Objectives of inventories, The different cost of inventories, Reasons for having large or small inventories, Types of demand an influence in the inventories, Types of systems andinventory models, Assumptions of the deterministic inventory model or Wilson model, Graphical representation of the deterministic model, The functions of inventory control, the ABC method of inventory control.
We have made a deep research in each of these points, so we get to know a lot of different things about milka. While we were searching for this information we also get to know other thingabout milka.
So we hope that the information below is useful for anyone to get informed about Milka.

1.1 Inventory classification

In Milka as in all the other enterprises an Inventory is a necessary evil in any organization engaged in production, sale or trading of products. Inventory is held in various forms including Raw Materials, Semi Finished Goods, Finished Goods and Parts.Everyunit of Milkas inventory has an economic value and is considered an asset of the organization, of where the inventory is located or in which form it is available. Depending on the nature of business, the inventory holding patterns may vary. While in Milkas cases the inventory is very high in value. Inventory helps physically at the manufacturing locations or in a third stock location.InventoryControllers are engaged in managing Inventory. Inventory management involves several critical areas. Primary focus of inventory controllers is to maintain |
optimum inventory levels and determine order timetables and quantities. They try to balance the inventory all the time and maintain optimum levels to avoid excess inventory or lower inventory, which can cause damage to the business. |
ABCClassification
Milkas Inventory runs in thousands of part numbers or classifications and millions of part numbers in quantity. Therefore inventory is required to be classified with some logic to be able to manage the same.
In Milkas organization inventory is categorized according to ABC Classification Method. Here the inventory is classified based on the value of the units. The principle applied hereis based on 80/20 principles. According to the classification can be as under:
A Category Items Comprise 20% of SKU & Contribute to 80% of $ spend.
B Category Items Comprise 30% of SKU & Contribute to 15% of $ spend.
C Category Items Comprise 50% of SKU & Contribute to 5% of $ spend.
Example: Table of Inventory Listing by Dollar Usage Percentage.

Item | Annual Usage in No.Units | Unit Cost-$ | Usage in Dollars | Percentage of Total Dollar Usage |
1 | 5,000 | 1.50 | 7,500 | 2.9% |
2 | 1,500 | 8.00 | 12,000 | 4.7% |
3 | 10,000 | 10.50 | 105,000 | 41.2% |
4 | 6,000 | 2.00 | 12,000 | 4.7% |
5 | 7,500 | 0.50 | 3,750 | 1.5% |
6 | 6,000 | 13.60 | 81,000 | 32.0% |
7 | 5,000 | 0.75 | 3,750 | 1.5% |
8 | 4,500 | 1.25 | 5,625 | 2.2% |
9 | 7,000 | 2.50 | 17,500 |6.9% |
10 | 3,000 | 2.00 | 6,000 | 2.4% |
Total |   |   | $254,725 | 100.0% |

1.2 Objectives

The objectives of inventory management in Milka are used to maintain a check and balance system for inventories in order to ensure that a sufficient supply is maintained with the required stocks. Milkas inventory gives a true position about the company's business as to how well it is performing.To reduce the requirement of cash in Milkas business, inventory turnover should be maximized and management should save itself from loss of production and sales. The main objective of Milkas inventory management is to maintain inventory at appropriate level so that it is neither excessive nor short of requirement, management is faced with 2 conflicting objectives.

1. - To keep inventory...