Inventory costs, resulting from their size and value, are one of the main components of so-called logistics costs. The purpose of this article is to present, on the one hand, aggregated data relating directly to the size of inventories on a national economy scale, and on the other hand, to discuss categories related to inventory maintenance. The basic element determining the cost of maintaining inventory is its value. It has a decisive influence on the cost of capital frozen in inventory and its size (weight, volume), which, along with the physicochemical characteristics of the inventory, affects the costs generated by the occupied warehouse space and the necessary outlays of living and objectified labor related to internal warehouse transport, as well as the necessary care for the stored inventory. It can therefore be assumed that the size of the costs of stored inventory is determined by the size of the inventory being stored. The shaping of this size is usually associated with specific methods of inventory planning – rotating and safety (see “A brief review of classical inventory theory”, p. 7). The above does not constitute the subject of this article, as its essence is to focus on elements related to reducing the costs of maintaining the shaped inventory.
Inventory size (in value terms)
The size of inventories stored in the country was determined for two groups of enterprises: for wholesale and commission trade and for manufacturing enterprises. These determinations did not include inventories accumulated in the trade of motor vehicles, motorcycles, and in manufacturing enterprises employing fewer than 50 employees. Taking into account the indicated national limitations, inventories in 2000 amounted to 58,805,519 thousand PLN, and a year later – 59,020,224 thousand PLN. It can therefore be assumed that the cited specific values are understated by at least approx. 10%, as small enterprises were not taken into account. Detailed inventory values in Polish commercial and manufacturing enterprises are demonstrated in tables 1 and 2. Analyzing the cited value data, it is noted that the lowest level of inventories over the years 2000-2001 in both sectors occurred in the first quarter of 2000, and then the value of inventories, with slight fluctuations, was characterized by an upward trend (figs. 1 and 2). In turn, observing inventory turnover in days (fig. 3), it can be stated that a similar trend occurs in both sectors; the longest turnover in days takes place in the first quarter of each of the studied years, and then it is accelerated. In the years studied, inventory turnover remained at the same level. The difference in days between inventory turnover in commercial and manufacturing enterprises also remained at an unchanged level. Inventories in commercial enterprises turned over on average 20 days faster than inventories in manufacturing enterprises.
Summing up, it can be stated that the registered picture of inventory formation in the country is basically unfavorable, as they did not decrease during the observed years. This situation could be justified by an increase in sales at the same time. To verify the above, a measurement was made and the ratio of maintained inventory to sales volume in value terms was calculated (fig. 4). The obtained results of 12% in 2000 and 12% in 2001 for manufacturing enterprises and 7.9% in 2001 and 8.1% in 2002 for commercial enterprises indicate that the size of inventories in the country does not have a downward trend, and therefore the problem of actions to reduce the costs of their maintenance is of great importance for the owners of these inventories.
The article comes from the magazine “Logistyka” 1/2003.