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It may be men. money.MADURAI . spares and other stocked to meet future demand. materials. TYPES OF INVENTORY: (1) Official Inventory (2) Unofficial Inventory ARAVIND .INVENTORY MANAGEMENT WHAT IS INVENTORY: Inventory is an idle resource which is usable and has value. plant acquisition.

NEED FOR INVENTORY:Inventory control is necessary to ensure. (Not too much. (a) Uninterrupted supply of materials. used.MADURAI . not too little) (c) Adequate controls over materials un-used. ARAVIND . (b) Optimal stock.

FSN 4. ABC Analysis (Always Better Control) 2. VED 3. Low) ARAVIND . The important methods are:1. HML “ “ “ “ (Vital. Essential. Difficult. Slow moving and Non-moving) (Scarce. Easy) (High.There are some selective Inventory control methods to have an effective control on the inventory.MADURAI . Medium. Desirable) (Fast. SDE 5.

Category A (High Cost) B (Medium Cost) C (Low Cost) % of items 10 20 70 % of value 70 20 10 ARAVIND .1. This analysis prepared and checked weekly or monthly. ABC Analysis (Always Better Control):Classify the items on the basis of importance and the technique of grouping is called as ABC analysis.MADURAI . To provide maximum overall protection against the stock outs for a a given investment in safety stock.

handling and delivery of materials to production department become better. • Store personnel are placed better with this analysis i.e their time can be utilized better.MADURAI .ADVANDAGES: • Preference for keeping inventory can be placed properly after ABC analysis. • Storing. ARAVIND .

For V items of A classification a close control should be kept on stock levels.MADURAI . but if it is a C items.. than large quantities mat be stored. no Stocks are. For V items. Desirable): ( This classification is applicable only for spare parts. It based on the price. a reasonable large volume of stocks might be necessary. required be kept. Essential. perhaps. while for D items. ARAVIND . availability etc. VED ANALYSIS ((Vital.2.

Slow moving and Non-moving): It based on the issues from stores. But ewe can’t apply the same procedure for its stocking. Easy) Scare item merely equal to the A item.3. SDE ANALYSIS (Scarce.MADURAI . 4. FSN ANALYSIS (Fast. Difficult. ARAVIND .

Medium.5. H Unit value > 1000 (Sanctioned by higher officials) M L Unit value 100 to 1000 Unit value < 100 ARAVIND .MADURAI . HML ANALYSIS (High. Low): Only the difference from the former is being that it is the unit value and not the annual consumption value.

To place orders frequently keeping the stock low for high valued and more used items.OBJECTIVES TO INVENTORY CONTROL:1. PRINCIPLE OF INVENTORY CONTROL:1. To avoid obsolescence of inventory. To minimize idle time by avoiding stock outs and shortages. 2. To place orders less frequently keeping sufficient stock for low valued and low consumed item. To avoid carrying cost. 3. 2.MADURAI . ARAVIND . 5. To keep the investment on inventories to the minimum. 4. To improve quality of care with lesser inventory.