Selective Inventory Control System:

Sr.No. Type of Control Criteria Appliation

ABC analysis (always better Annual consumption value of To control inventory of raw materials
1 control) the item. and WIP inventories.
To review the actual inventories, their
Inventory value of items in uses etc. at scheduled intervals of
2 XYZ analysis stores stock-checking
To determine the stocking level of
spare parts for machines and
3 VED analysis Criticality of the item equipment
Consumption pattern of the
4 FSN analysis item To control obsolescence
To control purchases and to develop
5 HML analysis Unit price of the item suitable vendors
Purchasing problems in regard Lead time analysis and purchasing
6 SDE analysis to availability strategies.
Procurment and holding strategies for
SOS analysis - Seasonal off Nature of supplies and seasonal items (agricultural products
7 seasonal seasonality etc.)
GOLF analysis -
Government, Open market,
8 Local and Foreign source) Source of supply of materials Procurement strategies.

BASIS FOR ABC CLASSIFICATION:

PERCENTAGE OF TOTAL PERCENTAGE OF TOTAL

CLASS OF ITEM
NUMBER OF ITEMS CONSUMPTION VALUE
A - VITAL FEW 10% 70%
B - Moderate importance 20% 20%
C - Trival many 70% 10%