The document outlines guidelines for controlling inventory through an inventory control procedure. It divides products into three categories - small cheap parts, larger more costly products, and very large expensive products - to make reordering easier. The procedure also ensures stock is usable, traceable, and the right products are efficiently selected and delivered.
The document outlines guidelines for controlling inventory through an inventory control procedure. It divides products into three categories - small cheap parts, larger more costly products, and very large expensive products - to make reordering easier. The procedure also ensures stock is usable, traceable, and the right products are efficiently selected and delivered.
The document outlines guidelines for controlling inventory through an inventory control procedure. It divides products into three categories - small cheap parts, larger more costly products, and very large expensive products - to make reordering easier. The procedure also ensures stock is usable, traceable, and the right products are efficiently selected and delivered.
for ultimate salability, usability and traceability, and ensuring efficient selection and delivery of products.
Done by dividing products into three categories to
make it easier to reorder them and figuring out the number of stocks need to be kept on shelves. These categories include: one for small, cheap parts and products It is different from the other systems because it one for somewhat larger and more costly doesn’t rely on constant inventory updates. products A warehouse manager simply looks at his one for very large, expensive products inventory levels once a week or month (or Used by companies that sell products in a wide variety of categories and sizes. whatever timeframe they wish) and decides how It segregates inventory into 3 categories based on its many products the company will need from that revenue and control measures required: A is 20% of time to the next inventory check. items with 80% of total revenue and hence asks for It is risky for it could lead to product shortages tight control; B is 30% items with 15% revenue; whereas ‘C’ is 50% of the things with least 5% or overstock if it isn’t done right. For companies that specialize in big, slow-selling revenue and henceILLUSTRATION treated as most liberal. products, like pianos, refrigerators, caskets, etc. ILLUSTRATION
ILLUSTRATION
It involves the storage of goods in two
bins, one of which contains working stock and the other containing reserve stock. It has two stockpiles of products: one for normal operations and one for backup use only. It could be a good system for retailers, wholesalers and manufacturers of electronics, books, toys and other products that are less prone to decay. To use this system, reordering goods as soon as the working stock bin is empty should be done, so that replacement parts arrive before the reserve stock bin is empty
ILLUSTRATION
It is a computer program that
automatically routes orders to the designated order system, in the case of odd lot orders, or directly to brokers working on the floor of an exchange. It has the capacity to execute orders with both speed and accuracy. It has the ability to provide another layer of security against fraud, thereby helping to control risk too. ILLUSTRATION
It is the simplest way to manage
inventory. It works well for many types of companies. A retailer and a seller of a lot of inexpensive products can use this, Minimum-Maximum System, just PROBLEM EXAMPLE: as well as a manufacturer who uses The Maham Autos deals in cars. The selected data is given a lot of small parts to build their end below: products. Annual demand: The approach is built on two Maximum demand: 730 cars per year conditions: initially we start by Normal or average demand: 365 cars per year Minimum demand: 283 cars per year tracking the current stock level - Lead time in days: which is typically the sum of the Maximum lead time: 98 days stock-on-hand, plus the stock-on- Normal or average lead time: 87 days order for every single SKU. Then, Minimum lead time: 73 days when the total stock reaches a SOLUTION Minimum value, the system Maximum demand per day: 730 cars/365 days = 2 cars automatically alerts the user, and a per day subsequent reorder is placed Average demand per day: 365 cars/365 days = 1 car targeting a specific Maximum total per day stock level. Minimum level of inventory = (Maximum demand per day × Maximum lead time) – (Average demand per day × Average lead time) = (2 units × 98 days) – (1 unit × 87 days) = 196 units – 87 units = 109 units
REFERENCES
Lockard,R. (2011). Which Inventory
Control is Right for your Business. SALGADO, LOVELY www.fishbowlinventory.com/blog/201 JAZE A. 1/12/19/inventory-control-methods- BSA 2B business/