This document discusses different inventory control techniques, including economic order quantity (EOQ) modeling and ABC analysis. It explains that EOQ modeling aims to minimize total holding and setup costs by determining the optimal reorder quantity. The EOQ assumes uniform demand and constant carrying and unit costs. ABC analysis divides inventory into categories (A, B, C) based on descending value, with category A items having the highest value and requiring the tightest control.

1. EOQ,ABC
INVENTORY CONTROL TECHNIQUES
Cost Accounting Assignment
TANISH KALRA (21920)
B.COM PROG
SEMESTER- IV
.

2. INVENTORY CONTROL
Inventory control is the process of deciding
what and how much of various items are to
be kept in stock

3. Benifits
• No shortage of any item at any stage of
production.
• It reduces the investment in inventories
• Materials are made available at the most
economic rates.
• Delays and interruptions in production does not
occur

4. Inventory Models : Deterministic
Demand
 Economic Order Quantity (EOQ)MODEL
 The most basic of the deterministic inventory models is the economic
order quantity(EOQ)
 The variable cost in this model are annual holding cost and annual
ordering cost
 EOQ minimizes the sum of holding and setup cost

5. ECONOMIC ORDER QUANTITY
 The economic order quantity or the recorder quantity is the quantity of the
item which is most economical to order when fresh supplies are required
 At such level or reorder the total of order in cost and inventory carrying
cost would be minimum

6. ASSUMPTIONS
 The demand for the purchased or the manufactured items is at a uniform
rate
 Carrying cost of inventory per unit per unit per year is constant.
 Unit cost of item is constant

7. ABC analysis
 ABC analysis is a method in which inventory is
divided into three categories ,i.e A,B and C in
descending value. The items in the A category
have the highest value ,B category items are of
lower value than A, and C category items have
the lowest value.

8. CLASSIFYING INVENTORY ITEMS
 A Items : very tight control , complete and accurate records , frequent
review
 B Items : less tightly controlled , good records , regular review
 C Items : simplest control possible , minimal records , large inventory ,
periodic review and re-order

9. ThankYou