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Inventorycontrolfinalppt 091029152005-phpapp01


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this is the presentation on management of inventory control and inventory control method

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Inventorycontrolfinalppt 091029152005-phpapp01

  1. 1. Topic- Inventory Control Dharmender kumar INVENTORY CONTROL 03/29/13 1
  2. 2. All the materials , parts, suppliers, expenses and inprocess or finished products recorded on the booksby an organization and kept in its stocks,warehouses or plant for some period of time. INVENTORY CONTROL 03/29/13 2
  3. 3. Inventory control is the technique of maintainingthe size of the inventory at some desired levelkeeping in view the best economic interest of anorganization. INVENTORY CONTROL 03/29/13 3
  4. 4. Type of Inventory Reason for holding the Inventory(1) Raw materials To reap the price advantage available on seasonal raw materials.(2) Work in progress To balance the production flow.(3) Ready made components When the components are bought rather than made.(4) Scraps They are disposal of in bulk.(5) Finished Goods Lying in stock rooms and waiting dispatches 03/29/13 INVENTORY CONTROL 4
  5. 5.  Protection against fluctuations in demand; Better use of men, machines and material; Protection against fluctuations in output; Control of stock volume; Control of stock distribution. INVENTORY CONTROL 03/29/13 5
  6. 6.  Planning the inventories; Procurement of inventories; Receiving and inspection of inventories; Storing and issuing the inventories; Recording the receipt and issues of inventories. Physical verification of inventories; Follow-up function ; Material standardization and substitution. INVENTORY CONTROL 03/29/13 6
  7. 7. Executive decide two basic issues while dealing with inventories; (a) How much of an item to order when the inventory of that item is to be replenished. (b) When to replenish the inventory of that item. By definition, inventory facilitate production or satisfy customerdemands.Inventory system is a set of policies and controls which monitors anddetermines the levels of inventory. Inventory conventionally include rawmaterials, work-in-progress, components parts, supplies and finished goods.Operations is a transformation process in which the inputs are raw materialsand output is the finished goods.Suppliers Raw materials work in progress Finished goodcustomers. INVENTORY CONTROL 03/29/13 7
  8. 8. Supply Inventory level Demand rate rate INVENTORY CONTROL 03/29/13 8
  9. 9.  Deciding the maximum- minimum limits of inventory; Determination of Reorder point; Determination of reorder quantity; Perpetual inventory control; ABC analysis; Method of control through turn over. INVENTORY CONTROL 03/29/13 9
  10. 10.  Quantity of inventory above which should not be allowed to be kept. This quantity is fixed keeping in view the disadvantages of overstocking; Factors to be considered: Amount of capital available. Godown space available. Possibility of loss. INVENTORY CONTROL 03/29/13 10
  11. 11.  Cost of maintaining stores; Likely fluctuation in prices; Seasonal nature of supply of material; Restriction imposed by Govt.; Possibility of change in fashion and habit. INVENTORY CONTROL 03/29/13 11
  12. 12.  This represents the quantity below which stocks should not be allowed to fall . The level is fixed for all items of stores and the following factors are taken into account:1.Lead time-2. Rate of consumption of the material during the lead time. INVENTORY CONTROL 03/29/13 12
  13. 13.  It is the point at which if stock of the material in store approaches, the store keeper should initiate the purchase requisition for fresh supply of material. This level is fixed some where between maximum and minimum level. INVENTORY CONTROL 03/29/13 13
  14. 14.  It is also known as standard order quantity , optimum quantity or economic lot size. By definition economic order quantity that size of order for which the total cost is minimum. INVENTORY CONTROL 03/29/13 14
  15. 15.  The widely used formula is EOQ =√{2RCp/Ch}Where ,R= Annual quantity to be used in units.Cp=Cost of placing an Order.Ch= cost of holding one unit for one year. INVENTORY CONTROL 03/29/13 15
  16. 16. It is efficient control of stores requires greater in case of costlier items. INVENTORY CONTROL 03/29/13 16
  17. 17. Item Quality Quantity order CheckingA Costlier Less Regular system to see that there is no overstocking as well as that there is no danger of production being interrupted for unwanted material.B Less costlier Order may be on Position being viewed review basis. in each monthC Economical Larger Order in large quantity so that cost can be avoided INVENTORY CONTROL 03/29/13 17
  18. 18. INVENTORY CONTROL 03/29/13 18
  19. 19.  Stores ledger, stores control, cards or bin cards are properly maintained ; Quantity balance store shown in the store ledger; stock control and bin cards are reconciled; Exploring the cause of discrepancies if any physical balances and book balances. INVENTORY CONTROL 03/29/13 19
  20. 20. It means how many times a company’sinventory is sold and replaced (finishedproduct) INVENTORY CONTROL 03/29/13 20
  21. 21. Inventory ratio (Raw material)-The value of material consumed during a period Average value of inventory during that period High ratio = fast moving stock INVENTORY CONTROL 03/29/13 21
  22. 22. Thank you INVENTORY CONTROL 03/29/13 22