You are managing the inventory for a manufacturing company and notice that certain items in the store are not being utilized frequently, leading to…

Detection of slow moving and non-moving item of stores: The existence of slow moving and non-moving item of stores can be detected in the following ways. (i) By preparing and perusing periodic reports showing the status of different items or stores. (ii) By calculating the inventory turnover period of various items in terms of number of days/ months of consumption. (iii) By computing inventory turnover ratio periodically, relating to the issues as a percentage of average stock held. (iv) By implementing the use of a well-designed information system. Necessary steps to reduce stock of slow moving and non-moving item of stores: (i) Proper procedure and guidelines should be laid down for the disposal of non-moving items, before they further deteriorate in value. (ii) Diversify production to use up such materials. (iii) Use these materials as substitute, in place of other materials.