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MAKING GOODS &

SERVICES
AVAILABLE
Presented by: Anum Zehra
Shahina Yasmeen
Samena Yasmeen
Afsheen Ghani
INTRODUCTION
In this presentation we shall be discussing that
aspect of a business which deals with its goods,
what are they, how they are stored i.e. inventory,
how this inventory is controlled and managed to
maintain an optimum stock, the major modes of
transportation of these goods and how are they
stored in warehouses for present & future use.
TYPES OF GOODS
Goods are generally divided into 5 categories
o Capital Goods e.g. factories, machinery etc.
o Supplies i.e. Typewriter ( is a capital good ) needs paper (which are the
supplies).
o Raw material & parts e.g. grain, chemicals, mechanical or electrical
motors etc.
o Goods in Process (also called semi finished goods)
o Finished goods
NOTE
It is important to note that ONE COMPANIES RAW MATERIAL OR
SUPPLY IS THE FINISHED GOOD OF ANOTHER e.g. nails or wooden
planks are finished goods of one company but are raw material/supply of
anothers.
Of all the categories the largest stock piled goods are the GOODS IN
PROCESS as they can be required at any time.
TYPES OF CONSUMER GOODS
Depending about durability & preference consumer goods are divided into the
following groups.

CONVENIENCE GOODS they are easily available to consumers without any


extra effort. These goods are mostly sold by wholesalers to make them available to
the consumer in good volume. They are further sub categorized into :-
STAPLE GOODS e.g. bread, milk etc.
IMPULSE GOODS e.g. candies, ice cream, cold drinks etc.
EMERGENCY GOODS e.g. medicines, umbrellas etc.
DELIVERED GOODS e.g. milk, groceries etc.
SHOPPING CONSUMER GOODS e.g. radio, TV etc.
SPECIALITY CONSUMER GOODS e.g. antiques, cars etc.
UNSOUGHT CONSUMER GOODS e.g. insurance policies etc.
DURABLE CONSUMER GOODS e.g. furniture, kitchenware, electronics etc.
SEMI DURABLE CONSUMER GOODS e.g. clothes, shoes etc.
NON DURABLE CONSUMER GOODS e.g. milk, bread etc.
INDUSTRIAL GOODS
Industrial goods are products that companies purchase to make other
products, which they then sell. Some are used directly in the production
of the products and some are used indirectly. Unlike consumer goods,
industrial goods are classified on the basis of their use rather than the
customer buying habits. These goods are divided into five subcategories:
installations, accessory equipment, raw materials, fabricated parts and
materials, and industrial supplies.
Raw Materials e.g. iron ore, crude oil, diamonds, copper, timber,
wheat & leather. Some (e.g. wheat) may be converted directly into
another consumer product (cereal). Others (e.g., timber) may be
converted into an intermediate product (lumber) to be resold for use in
another industry (construction).
Installations e.g. conveyor systems, robotics equipment, stamping
machines, large commercial ovens etc.
Accessory Equipment Goods e.g. include hand tools, computers,
desk calculators, and forklifts.
Fabricated Parts and Materials Many industries, including the
auto industry, rely heavily on fabricated parts. Automakers use such
fabricated parts as batteries, sun roofs, windshields & spark plugs.
They also use several fabricated materials, including steel
&upholstery fabric. As a matter of fact, many industries actually buy
more fabricated items than raw materials.
Industrial Supplies e.g. computer paper, light bulbs, lubrication
oil, cleaning supplies, and office supplies.
INVENTORY CONTROL
Inventory control regulates the need for sufficient stock of goods keeping
in view the relevant costs of buying, storing & handling its record.
It aims at avoiding UNDER STOCKING as well as OVER STOCKING
& thus maintaining OPTIMUM SIZE.
Shortage Of Inventory - It may cause the following damages
Customer needs cannot be fully satisfied.
It is harmful during rising prices.
Regular customers may change their loyalty.
Unexpected large orders cannot be fulfilled.
Risk involved in the non availability of needed goods.
Goodwill ( companies name & repo ) is forever damaged.
Overstocking too is harmful & results in the following
Money used to purchase the goods are stuck without
producing any return on it.
If fashion & trends change the stock will become outdated.
New inventions & innovations render the stock obsolete.
Possibility of theft & damages increases the cost of carrying
inventory.
COST OF CARRYING INVENTORY
It involves
Storage cost/Holding cost
Rent of the store if its not owned
Cost of insurance
Cost of physical damage (dents, breakage, scratches).

Handling cost
Loading & unloading & movements of materials.

Misc. cost
Cost of stationary, racks, cupboards, counters, furniture etc.
Government taxes.
Interest or borrowed funds used to purchase items.
Change in demand as well as seasonal change
MAJOR REASON FOR CONTROLLING
INVENTORY
In some cases it is good to have materials & components in stock but
at the same time it can also be dangerous because if there is a change
in the model, in the companies product or just a particular component
is unsuitable the stock will be discarded or outdated.
Also some times cost may vary it can be high or with time deteriorate.
So, its always safe neither to be overstocked nor under stocked & to
assure this a company should be aware of current trends & forecast.
And if this is done properly the person responsible for this job can
save a lot of money for the company as well as eliminate waste in the
quality of goods selected, in the quantities ordered & can be used in
the expenditures for transportation, storage & distribution to the
market.
DEPARTMENTS RELATED TO
INVENTORY
Stores Department
This department maintains a min. quantity known as a
SAFETY LEVEL of stock. Once stock goes below this level it
must be restored.
Inventory Record Department
As the name implies this department keeps all the inventory
records. All incoming & outgoing items should be recorded
immediately.
Purchase Department
This department is responsible for buying, stocking,
requisition issuing & shipping goods.
METHODS OF CONTROLLING
INVENTORY
They are of two types
Perpetual inventory system.
Periodic inventory system.
Perpetual Inventory System where a business keeps continuous,
moment to moment records of the number values & type of inventions
that it has.
Periodic Inventory System where one does periodic inventory count
(such as once a month or at the beginning & end of the yr).
FACTORS FOR BUYING GOODS
Before purchasing goods following points should be kept in mind
Right price.
Right quality.
Right quantity.
Right time.
Right supply source.
When a purchasing agent goes to the market he/she should know
What product to buy ?
What quality, variety, grade, brand is required ?
How much quantity is to be purchased ?
Determination of price ?
STEPS IN PLACING ORDERS
Always keep in mind most often bulk quantities are ordered when
purchasing any good for any given business.
Determination of need in order to maintain an optimum stock when a
product is required a request called purchase requisition is issued. This
requisition contains details of the required goods as well as the quality &
quantity required.
Survey or market research it is conducted to have the following info

Location of supplies &type of goods they deal in.
Quality, variety & brands available.
Services, warranties & guarantees available with the goods.
Delivery period.
Credit & sales return facilities extended to buyers.
Type of discount offered.
Placing the order having done the above mentioned steps the buyer
places the order. It specifies the brand, quality, quantity, price, amount,
discount, delivery date & mode.

On receiving the goods it is compared with the shipment receipt to assure


everything is in order.
TRANSPORTATION
It is a key function in an overall business activity.
This helps not only in making goods available locally but also helps in
foreign trade as well as making foreign products available locally.
It also makes easy access for consumers.
There are several different types mode of transportation available out of
which we shall be discussing a few
Railroads
Trucks
Airlines
Waterlines
Pipelines
CLASSIFICATION OF CARRIER
Two types are available
Common Carrier
Contract Carrier
COMMON CARRIER {PUBLIC CARRIER or SIMPLY CARRIER}
is a person or company that transports goods for any person or
company without any discrimination at reasonable rates. Public airlines,
railroads, bus lines, taxi cab companies are included in this.
CONTRACT CARRIER only transports goods to a certain number of
clients & they can refuse to transport for anyone at any time.
STORAGE/ WAREHOUSING
It refers to holding of goods till they are demanded, sold or consumed.
Goods are stored for the following reasons
They are not yet demanded.
They are held in off seasons
When goods cannot be sold at a desired price.
Some goods are produced through out the year but used
seasonally.
Conversely, some goods are produced seasonally but
consumed year round.
Hence it plays a vital role not only in the success of a business but also in
our lives.
EVEN SHOP KEEPING IS A FORM OF STORING.
OBJECTIVES
Seasonal production but continuously used goods.
Continuously produced but occasionally used.
Uncertain demand or supply of goods.
Excessive supply.
KINDS OF WAREHOUSES
Public warehouse they are rented for business by the general public.
Private warehouse these are owned by the private businesses or
industries that store their own goods within them.
Bonded warehouse these warehouses are under the contract with the
customs authorities.
ADVANTAGES & FUNCTIONS OF
WAREHOUSING
Seasonal consumption e.g. blankets, warm clothes etc.
Seasonal production e.g. wheat, rice & cotton etc.
During transportation e.g. ship, truck, train etc.
Price stability
Safety & preservation of perishable goods
Loading
Aging e.g. rice, cheese etc.
Balance Supply & Demand
Sales by using receipts
DISTRIBUTION CENTERS
It looks like a warehouse but it is actually a place where goods are
reorganized for further shipment.
It is a sort of a tunnel.
UNLOAD LOAD OUT
Trucks/trains distribution center destination.

Sometimes goods may never even stop moving during this rearrangement
i.e. going through one door & leaving through the other.
TYPES OF AUTOMATION
Automation it is the use of control system i.e. to reduce human effort
in the production of goods & services.
Distribution centers are divided into 2 kinds:-
Soft automation in this paperwork & goods selection are
automated BUT employees must still collect, sort & label the
goods themselves.
Hard automation it is that center where computers &
machines gather various items from the slots/ areas & prepare
the shipping documents.
SUMMARY

What are goods ?


Types of goods
Consumer goods
Industrial goods
Difference between consumer & industrial goods ?
What is inventory & inventory control ?
Reasons why it is important ?
Ways of controlling it ?
Why is transportation important & what are its types ?
What is storage & warehousing & what are its types ?
What is a distribution center & what are its types ?
REFERENCES
A Practical Introduction To Business by Koontz & Fulmer
Introduction To Business by Mohammad Amin Khalid
http://www.robots.com/faq/201/what-is-the-difference-between-soft-auto
mation-and-hard-automation
www.altiusdirectory.com.business/types-consumers-goods.html
www.accounting-basics-for-students.com/eriodic.inventory.html
http://www.enotes.com/consumer-industrial-goods-reference/consumer-in
dustrial-goods