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effectiveness of the new technology and cost escalation sometimes, even total abandonment. In
order to avoid such an eventuality, the company should have an action plan consisting of :
i. The creation of specific formal organizations of experts and competent people.
ii. The establishment of thorough procedures for planning and monitoring of the effect and
iii. The integration of these organizations and procedures to implement the critical strategy that
determines the success of each specific technological exploitation.
If a large company wants to diversify effectively through research or to make radical
technical advances, the stimulus must come from the top corporate level. The top management
must be willing to underwrite long term fundamental and new product research, backed by
corporate-level opportunity seeking; and economic evaluation groups should help target research
activities and refine the commercial potential of research results. The company should then
develop a procedure which efficiently links together the series of sequential steps, leading from
the initial technical inquiries to the eventual goal of exploitation. It must ensure that the programme
is adequately planned – from research to exploitation. It must provide a basis for controlling the
transfer of research throughout its cycle. The procedure must monitor the three factors related to
technical progress, viz. technical and commercial effort versus results, rupee costs and returns and
the time interval. For the purpose of planning and controlling such techniques as PERT / CPM,
budget reviews, venture analyses, rational , decision models, etc. are widely used. As each major
programme comes through the management is in a position to evaluate and incorporate changes ,
if any, from time to time. order to promote the smooth and efficient running of its affairs. It may
be held before the production cycle. In the form of raw material inventory, at an intermediate stage
in the production cycle, as in process inventory; or as the end of the production cycle, as finished
goods inventory”. There may be a spare parts inventory, too, depending on the actual need for
these parts. However, the finished goods inventory is considered to be the most prominent, through
the procedure developed can be adapted with minor changes in other types of inventory as well.
There can be inventory control in uncertainly without reordering, inventory control with ordering
with a certain amount of demand, and inventory with recording the uncertain demand.
A certain amount of inventory is essential for efficient functioning in any company. It,
however, depends on the actual of various factors, such as economic order quantity (EOQ), lead
time, the magnitude of certainly, determinant forces, and so on. Control over inventory can be