b Policy documents and historical data to examine the past and present

B policy documents and historical data to examine the

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b. Policy documents and historical data to examine the past and present environments. Inventory Management at Gul Ahmed Textile: Inventory is the major component of their financial statements and they put more effort to maintain the inventory for smooth flow of production. They have a fool proof inventory movement system “Inventory Management” system. They are using the weighted average inventory system for calculating the rates of the individual item. But They prefer to use the FIFO for the issuance of the inventory to different units. They are maintaining the minimum stock of every item that tell us about the re-ordering of that item and they calculate this minimum inventory level by considering the maximum lead time and the safety stock. They keep the sufficient safety stock in their store for Spears and tool and general items as the major item are imported that takes more time to import and for Dyes and chemicals they maintaining the minimum stock as per their planning of the next three months’ orders. As the dyes and chemicals are highly volatile items and they turn into the dead stock after one year they use prudent approach for these items.
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They recommend the average inventory turnover for the local dyes & chemicals for two weeks and for imported dyes & chemicals for four months (based on future orders). And for Stores & Spares they broken down the items in three categories such as “Insurance Items” (That could be required any time in emergency and they keep them in stock to avoid any long stoppage of machines, they normally include the critical parts for the machine and that could take more than 4 weeks to import. Second one is “Running Items” that are commonly use spare parts and tool and they keep its inventory as per explain above and all the spare parts, Tolls and general items are approved in the yearly budgets department wise. Flow chart for Procedure at Textile Mills
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Procedure Flowchart at Textile Mills Supply Chain Management for Inventory: They have the very strong and effective supply chain management, they have the number of items that are major component of the Textile Industry that is Cotton, Yarn, Gray, Dyes & Chemicals, Spare parts, Packing Material, Stitching Accessories, General Items etc. They have the very transparent procedure of the procurement of the above items, Cotton is normally a very specific material and the cotton are trade and fluctuate on daily basis so the forward purchasing is done from the suppliers to avoid any stock out position. They booked their cotton on the basis of the orders received from the export and the Local retail shops. The same procedure applies to the Yarn and the Gray procurement. Dyes & Chemicals are mainly imported and They have the internationally recognized suppliers like BASF, Clariant, Dystar, Stork etc . they are the quality suppliers and they are also
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recommended by their valued customer as well. For the Local purchasing such as chemicals, packing material and General Items They get the quotations from different suppliers and
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