objective Material control The publication of the Institute of Cost and Management Accountants on Budgetary Control defines Material

Control as the function of ensuring that sufficient goo ds are retained in stock to meet all requirements without carrying unnecessary l arge stocks . When the function of indexing buying, receiving, inspection, storing and buying the goods are separated, it is essential that these should be properly co-ordina te so as to achieve the advantages of specialization. Objectives of system of material control The objectives of a system of material control are the following Ensuring that no activity particularly production, suffers from interruption for want of materials and stores. It may be noted that this requires constant avail ability of every item that may be needed howsoever small its cost may be. Lubric ating Oil may cost much less than the main raw material but, from the point of v iew of uninterrupted production, both have equal importance. Seeing to it that all the materials and stores are acquired at the lowest possib le price considering the quality that is required and considering other relevant factors like reliability in respect of delivery etc. Minimization of the total costs involved both for acquiring stocks (apart from t he price paid to the supplier) and for holding them. Avoidance of unnecessary losses and wastages that may arise from deterioration i n quality due to defective or long storage or from obsolescence. It may be noted that losses and wastages in the process of manufacture, concern the production department. Maintenance of proper records to ensure that reliable information is available f or all items of materials and stores that not only help in detecting losses and pilferages but also facilitates proper production planning. The fulfilment of the objective mentioned above will require that standard lists of all the materials and stores required for the firm s work can be drawn up with the weekly consumption figures. Moreover the lead time for each item has to be determined which will then enable the firm to ascertain the minimum quality for each item. It is also necessary t o fix maximum quantity so that capital is not locked up unnecessarily and the ri sk of obsolescence is minimized. Costs are minimized through the use of ABC Anal ysis (which means the classification of various items on the basis of investment into three categories i.e. A, B and C)