Ending inventory refers to the book value of goods, materials or raw materials available for use or sale at the end of an inventory accounting period. Inventory is the goods actually stored in the warehouse. It can be divided into two categories: one is production inventory, which is stored to ensure the uninterrupted supply of materials consumed by enterprises and institutions; the other is circulation inventory, that is, the finished product inventory of production enterprises and the inventory of production authorities and inventory of material authorities at all levels.

Basic concepts

Ending inventory refers to the book value of goods, materials or raw materials available for use or sale at the end of an inventory accounting period. Inventory is the goods actually stored in the warehouse. It can be divided into two categories: one is production inventory, which is the inventory of grassroots enterprises and institutions that directly consume materials. It is stored to ensure the uninterrupted supply of materials consumed by enterprises and institutions; the other is circulation inventory. , that is, the inventory of finished products of production enterprises, the inventory of production authorities and the inventory of material authorities at all levels. In addition, there are special forms of national reserve materials, which are mainly used to ensure the timely and complete supply or sale of materials to grassroots enterprises and institutions.

Problems with inventory:

(1) Single-cycle inventory and multi-cycle inventory

Items can be divided into single-cycle inventory based on the number of repetitions of demand for items. Inventory and multi-cycle inventory requirements. The so-called single-cycle demand refers to the occasional demand for a certain item, the demand that only occurs within a relatively short period of time or the inventory time cannot be too long, and the frequent and irregular demand for certain items with a short life cycle. .

Multi-period demand refers to the repeated and continuous demand for a certain item within a long enough period of time, and its inventory demand is continuously replenished.

(2) Independent demand inventory and related demand inventory

Independent demand inventory means that the user’s demand for a certain inventory item has nothing to do with other types of inventory, showing that the user’s demand for this inventory Independence of needs. Relevant demand refers to demand that is intrinsically related to other demands. Based on this correlation, an enterprise can accurately calculate its demand quantity and demand time. It is a deterministic demand.

(3) Deterministic inventory and random inventory

The so-called deterministic type means that the demand for the item is known and determined, and the lead time of the replenishment supply chain is fixed. , and has nothing to do with the order quantity. When these two conditions are not met, the deterministic model is no longer applicable. The so-called random type means that at least one of the demand for an item and the lead time of the replenishment supply chain is a random variable.

In addition, according to the inventory path, the inventory held by the company can also be divided into: raw material inventory, work-in-progress inventory, maintenance/repair/operation supplies inventory, packaging and low-value consumables inventory and finished products in stock.

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