Budgetary Management of Supplies

The role of the supply function can be defined as an obligation to provide sufficient raw materials and components in terms of quality and quantity at the desired time, at the lowest possible cost. As such, the setting up and maintenance of a stock entail “technical” costs, whose minimization must become an important objective of this function. In this article, we aim to present the categories of costs generated by stocks, the relations for determining the stock cost, the specific terminology, namely active stock, safety stock and replenishment stock, inventory management models in a certain future and in an uncertain future, as well as supply budgeting, constant periods budgeting and budgeting by means of constant quantities, all of these issues being illustrated through examples.