Inventory Control

Inventory???
The term inventory includes materials raw, in process, finished packaging, spares and other stocked in order to meet an unexpected demand or distribution in further.

Inventory Management and control

Inventory management involves the development and administration of policies, system and procedures which will minimize total cost. Inventory control pertains primarily to the administration of established policies, systems and procedures.

Factor influencing inventory control

Types of product Types of manufacture Volume of production

Process of inventory control

Determination of optimum inventory levels Determination of degree of control Planning and design of inventory system Planning of Inventory control

Inventory control techniques

Always Better Control (ABC) Analysis High, Medium and Low (HML) Analysis Vital, Essential and Desirable (VED) Scarce, Difficult and Easy to obtain (SDE) Fast, Slow and Non Moving (FSN) Economic Order Quantity Two Bin system

ABC Analysis
ABC inventory control technique divides inventory into three categories A, B and C based on their annual consumption value. ABC analysis is often called Selective inventory Control Method (SIM).

HML Analysis
The HML Classification follows the same procedure as is adopted in ABC Classification only difference is that in HML Classification unit value is criterion and not the annual consumption value.

VED Analysis
The VED analysis is done to determine the criticality of an item and its effect on production and other services. This is specially used for classification of spare parts.

SDE classification
SDE classification based on problems faces in procurement This classification is vital to lead time analysis and in deciding on purchasing strategies.

FSN Analysis
FSN classification based on the pattern issues from stores and is useful I controlling obsolescence FSN analysis is helpful in identifying active items which need to be review regularly.

Economic Order Quantity

Economic Order Quantity technique solve the problem of size of the material order. EOQ is the level of inventor order of which inventory cost is minimum

Two Bin Technique

In Two Bin Technique, stock of each item is separated into two bins. One bin contains stock, just enough to last from the date a new order is placed. Other bin contains a quantity of stock enough to satisfy probable demand during the period of replishment.