INVENTORY MANAGEMENT TECHNIQUE IN CONSTRUCTION

The concept of inventory management has been one of many analytical aspects of management. This involves optimizing the resources available to store various materials. Lack of inventory may lead to stock-outs, resulting in production downtime, but a very high inventory on the other hand may lead to an increase in production costs due to the high cost of inventory transport. Thus, inventory optimization should ensure that stocks are neither too low nor too high. Stocks such as finished products, work in progress, components, raw materials, stores, spare parts, etc. Represent 80% or more of working capital in some of the representative industries studied in the past. It would appear that any effort to rationalize inventories can lead to substantial savings. For example, a scientific control system can dramatically reduce investment in stocks, sometimes up to 50 percent or even more. This paper deals with ABC and EOQ Analysis of Construction Company and finally concluding section, project provides detail of financial analysis of effective utilization of inventory models in material management for cost reduction