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Unit I
www.msubbu.in
Inventory
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Control
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Dr. M. Subramanian
Associate Professor
Department of Chemical Engineering
Sri Sivasubramaniya Nadar College of Engineering
Kalavakkam 603 110, Kanchipuram (Dist)
Tamil Nadu, India
msubbu.in[AT]gmail.com
21-September-2011
Inventory
Raw materials - materials and components scheduled for use
in making a product.
21-September-2011 M Subramanian
The Reasons for Keeping Stock
Lead Time - The time lags present in the supply chain, from
supplier to user at every stage
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Cost Associated with Inventory
Inventory capital
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Inventory Control
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Techniques of Inventory Control
The different techniques of inventory control are:
(1) ABC analysis,
(2) HML analysis,
(3) VED analysis,
(4) FSN analysis, ww
(5) GOLF analysis and w.m
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(6) SOS analysis. bu
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ABC Analysis
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A Top 80% of total value
B Next 15%
C Next 5%
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Other Techniques of Inventory Control
HML analysis: In this analysis, the classification of existing inventory is
based on unit price of the items. They are classified as high price,
medium price and low cost items.
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Economic Order Quantity (EOQ)
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Average inventory = 1/2 (maximum level + minimum level)
= (Q + 0)/2 = Q/2
Holding cost = (order quantity/2) x holding cost per unit per year
21-September-2011 M Subramanian