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Inventory Control

The document describes three inventory control methods: ABC analysis, VED analysis, and FSN analysis. ABC analysis classifies inventory into A, B, and C categories based on annual consumption and value, with category A items receiving the most control. VED analysis classifies inventory as vital, essential, or desirable based on criticality and shortage costs. FSN analysis classifies inventory based on demand patterns, with fast-moving items kept closest to storekeepers and non-moving goods stored away.

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Jayakumar Radhakrishnan
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325 views8 pages

Inventory Control

The document describes three inventory control methods: ABC analysis, VED analysis, and FSN analysis. ABC analysis classifies inventory into A, B, and C categories based on annual consumption and value, with category A items receiving the most control. VED analysis classifies inventory as vital, essential, or desirable based on criticality and shortage costs. FSN analysis classifies inventory based on demand patterns, with fast-moving items kept closest to storekeepers and non-moving goods stored away.

Uploaded by

Jayakumar Radhakrishnan
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd

INVENTORY CONTROL METHODS

Methods
1. ABC Analysis 2. VED Analysis 3. FSN Analysis

1. ABC Analysis
The origin of ABC Analysis PARETOS 80-20 rule. Also known as Always Better Control Classification of the inventory. Classification based on annual consumption and the annual value of the item. It is applicable almost all aspect of material management. Items of inventory classified in to A-B-C

Control applied selectively to contribute to a better management. Avoiding the wastage of time. Materials are classified in to 3 categories or grads for control. They are
I. A-Class Material
o Very tight control o Item being high value o Control need be exercised at high level authority

II. B-Class Material


o Moderate control o Item being of moderate value o Control exercised by middle level authority

III. C-Class Material


o Item being low value o Control exercised by respective users or department

2. VED Analysis
Material classified up on the criticality. Criticality depends on whether the material is vital, essential, or desirable for the production. VED ranking is done on the basis of the shortage costs. It is mainly used in the spare parts business. Inventories are classified as vital, essential, and desirable item.

3. FSN Analysis
Based on the demand for the material and stock-moving pattern. Fast moving material keep near to the store keeper. Slow moving material stocked at a considerable distance. Non-moving goods are stocked without causing inconvenience to men and material.

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