The document discusses various concepts related to materials management and costing. It defines key terms like cost, cost accounting, objectives of cost accounting. It describes different cost classification methods, materials control techniques like bin cards, store ledgers. It explains concepts of economic order quantity, reorder level, maximum and minimum levels. Finally, it discusses different inventory valuation methods like FIFO, LIFO, simple and weighted average.
Warehouse Management & Inventory ManagementGheethu Joy
This presentation includes notes collected from various sources from internet during my study journey with regard to the topic Warehouse Management & Inventory Management
Inventory Control and Replacement Analysis Priyanshu
This document discusses inventory control and replacement analysis. It begins by defining inventory and the reasons for keeping inventories. It then discusses the objectives and benefits of inventory control, and describes several techniques used for inventory control including ABC analysis. The document introduces inventory models and defines economic order quantity. Finally, it briefly introduces different types of replacement policies used to replace items as they decline in efficiency over time.
This document discusses materials management and inventory control. It defines key terms like materials, inventory, and material control. The objectives of material control are to have the right materials available when needed and to purchase efficiently. Different methods for valuing stock are described, including FIFO, LIFO, weighted average, and specific identification. The economic order quantity formula is provided to determine optimal order sizes. Level setting establishes maximum, minimum, and reorder levels to avoid overstocking or understocking. An example calculation demonstrates how to determine these three control levels.
This document discusses inventory management. It defines inventory as physical goods held by an organization awaiting use, processing, or sale. The purpose of holding inventory is to ensure continuous production and sales despite fluctuating demand. Effective inventory management aims to maintain optimal inventory levels to balance costs with avoiding stockouts. Tools for inventory management include determining stock levels, safety stocks, economic order quantity, ABC analysis, and inventory reports. The document also outlines different inventory ordering systems.
This document discusses techniques for material control, including setting reorder levels, economic order quantity analysis, ABC analysis, FNSD analysis, and VED analysis. Reorder levels are set based on lead time and daily usage. Economic order quantity balances material, ordering, and holding costs. ABC analysis recommends top management control high-value materials (Class A) that constitute 70-75% of total cost, while lower managers handle lower-value materials. FNSD analysis divides items into fast, normal, slow, and dead moving categories. VED analysis classifies spare parts as vital, essential, or desirable based on the impact of stockouts. These techniques aim to minimize waste and losses during material purchasing, storage, handling, and
This document discusses inventory management. It defines inventory and explains that inventory management involves determining optimal stock levels while balancing carrying costs, replenishment lead times, and demand forecasting. The document then provides more details on types of inventory, reasons for keeping stock, variables that affect inventory problems, classifications of inventory models, and deterministic inventory models like the economic order quantity model.
Cost Accounting Material & Labour cost control - Part ISuku Thomas Samuel
The document provides information on material and labor cost control techniques. It defines material and material control, and discusses objectives of material control like economy of purchase, maintaining appropriate stock levels, and minimizing wastage. Techniques discussed include ABC analysis, VED analysis, setting minimum, maximum and reorder levels, economic order quantity, and different methods of issuing material from stores like FIFO, LIFO, average cost. Store ledger accounts are maintained to systematically record receipts and issues of materials. Questions at the end provide transactions to prepare store ledger accounts using LIFO and FIFO methods.
This document discusses inventory management concepts. It defines independent and dependent demand and describes different types of inventories. It explains the functions of inventory including meeting demand, smoothing production, and protecting against stockouts. Key inventory terms are defined such as lead time, holding costs, and ordering costs. Different inventory models, counting systems, and classification approaches are outlined. The objective of inventory control is to balance customer service and inventory costs. Effective inventory management requires forecasting, lead time knowledge, and cost estimates.
Warehouse Management & Inventory ManagementGheethu Joy
This presentation includes notes collected from various sources from internet during my study journey with regard to the topic Warehouse Management & Inventory Management
Inventory Control and Replacement Analysis Priyanshu
This document discusses inventory control and replacement analysis. It begins by defining inventory and the reasons for keeping inventories. It then discusses the objectives and benefits of inventory control, and describes several techniques used for inventory control including ABC analysis. The document introduces inventory models and defines economic order quantity. Finally, it briefly introduces different types of replacement policies used to replace items as they decline in efficiency over time.
This document discusses materials management and inventory control. It defines key terms like materials, inventory, and material control. The objectives of material control are to have the right materials available when needed and to purchase efficiently. Different methods for valuing stock are described, including FIFO, LIFO, weighted average, and specific identification. The economic order quantity formula is provided to determine optimal order sizes. Level setting establishes maximum, minimum, and reorder levels to avoid overstocking or understocking. An example calculation demonstrates how to determine these three control levels.
This document discusses inventory management. It defines inventory as physical goods held by an organization awaiting use, processing, or sale. The purpose of holding inventory is to ensure continuous production and sales despite fluctuating demand. Effective inventory management aims to maintain optimal inventory levels to balance costs with avoiding stockouts. Tools for inventory management include determining stock levels, safety stocks, economic order quantity, ABC analysis, and inventory reports. The document also outlines different inventory ordering systems.
This document discusses techniques for material control, including setting reorder levels, economic order quantity analysis, ABC analysis, FNSD analysis, and VED analysis. Reorder levels are set based on lead time and daily usage. Economic order quantity balances material, ordering, and holding costs. ABC analysis recommends top management control high-value materials (Class A) that constitute 70-75% of total cost, while lower managers handle lower-value materials. FNSD analysis divides items into fast, normal, slow, and dead moving categories. VED analysis classifies spare parts as vital, essential, or desirable based on the impact of stockouts. These techniques aim to minimize waste and losses during material purchasing, storage, handling, and
This document discusses inventory management. It defines inventory and explains that inventory management involves determining optimal stock levels while balancing carrying costs, replenishment lead times, and demand forecasting. The document then provides more details on types of inventory, reasons for keeping stock, variables that affect inventory problems, classifications of inventory models, and deterministic inventory models like the economic order quantity model.
Cost Accounting Material & Labour cost control - Part ISuku Thomas Samuel
The document provides information on material and labor cost control techniques. It defines material and material control, and discusses objectives of material control like economy of purchase, maintaining appropriate stock levels, and minimizing wastage. Techniques discussed include ABC analysis, VED analysis, setting minimum, maximum and reorder levels, economic order quantity, and different methods of issuing material from stores like FIFO, LIFO, average cost. Store ledger accounts are maintained to systematically record receipts and issues of materials. Questions at the end provide transactions to prepare store ledger accounts using LIFO and FIFO methods.
This document discusses inventory management concepts. It defines independent and dependent demand and describes different types of inventories. It explains the functions of inventory including meeting demand, smoothing production, and protecting against stockouts. Key inventory terms are defined such as lead time, holding costs, and ordering costs. Different inventory models, counting systems, and classification approaches are outlined. The objective of inventory control is to balance customer service and inventory costs. Effective inventory management requires forecasting, lead time knowledge, and cost estimates.
Inventory control is the processes employed to maximize a company's use of inventory & Depreciation is the systematic reduction in the recorded cost of a fixed asset.
This document provides an overview of material and labour cost control. It discusses material control techniques like ABC analysis, VED analysis, inventory levels, and economic order quantity. It describes the steps in material control like purchase requisition, selection of suppliers, and receipt of materials. Pricing methods for material issues like FIFO, LIFO, and average cost are explained. The document also covers labour cost elements like direct and indirect labour. It defines idle time and overtime, and discusses causes of idle time like administrative, productive and economic causes. Time rate and piece rate systems for labour remuneration are introduced.
This document discusses inventory control models and techniques for determining optimal order quantities and reorder points. The Economic Order Quantity (EOQ) model is introduced as a method to determine how much of an item to order to minimize total inventory costs. The EOQ model balances ordering costs and carrying costs. It assumes demand is known and constant. The Economic Production Quantity (EPQ) model extends the EOQ model to situations where inventory is produced rather than ordered. Safety stock models account for uncertain demand by holding extra inventory to prevent stockouts. ABC analysis classifies inventory items into important and less important groups.
- Inventory management involves determining order quantities and reorder points to balance inventory carrying costs and ordering costs.
- The economic order quantity (EOQ) formula calculates the optimal order size to minimize total costs. Safety stock is added to the reorder point to protect against demand uncertainty.
- Transportation rates and quantity discounts can impact the optimal order size compared to considering just inventory carrying and ordering costs. Larger orders may be preferable if transportation costs per unit are reduced for larger shipments.
This document discusses inventory management. It defines inventory as materials obtained in advance of need that are held until used or sold. There are different types of inventories like raw materials, work in process, finished goods, and spare parts. Inventory valuation involves determining quality and assigning values. Costs associated with inventory include purchasing, ordering, holding, and shortage costs. The economic order quantity formula balances ordering and holding costs. Inventory control aims to have the right materials in the right quantity at the lowest cost through policies, stock levels, lead times, and order sizes.
The document discusses inventory control and various inventory models. It describes the components of inventory costs, including purchase costs, order costs, holding costs, and unavailable costs. It then explains the economic order quantity (EOQ) model, which aims to minimize total inventory costs by balancing order and holding costs. The EOQ model and formulas for optimal order quantity, reorder cycle time, number of orders, and total costs are provided. Extensions of the EOQ model for quantity discounts and warehouse space constraints are also summarized.
Inventory management involves tracking and controlling a company's stock of raw materials, work-in-progress, and finished goods. Effective inventory management requires balancing inventory investment with customer service levels. Key aspects of inventory management include classifying inventory using techniques like ABC analysis, planning inventory needs using models like MRP, and controlling inventory through periodic or perpetual counting systems. The overall goal is meeting customer demand while minimizing total inventory costs.
Cost classifications are used for four main purposes: preparing external financial statements, predicting cost behavior, assigning costs to cost objects, and making decisions. For financial statements, costs are classified as either product costs (recognized as assets until goods are sold) or period costs (expensed in the period incurred). Direct costs can be traced to specific cost objects, while indirect costs cannot. Variable costs change with activity level, while fixed costs remain constant. Only differential costs that differ between alternatives are relevant for decision making.
This document discusses various techniques for inventory management and control. It begins by defining inventory and classifying it into different types such as raw materials, work in process, and finished goods. It then discusses the objectives of inventory control such as protecting against demand fluctuations and improving production economics. Several techniques for controlling inventory are described, including ABC analysis, economic order quantity modeling, VED analysis, perpetual inventory systems, and reviewing slow-moving items. ABC analysis involves categorizing inventory into A, B, and C classes based on value and prioritizing control efforts accordingly. The document provides examples of how these techniques can be applied to manage inventory effectively.
This document provides an overview of inventory management models and concepts. It discusses the basic economic order quantity (EOQ) model, which determines the optimal order quantity to minimize total costs. The reorder point model is also introduced, which determines when to place orders based on expected demand during lead time. Fixed period review systems that place orders at set intervals are covered. Continuous review systems are also summarized, which use a reorder point policy to trigger orders of a fixed quantity when inventory falls below that level. Key assumptions and variables in inventory models like demand, lead time, ordering and holding costs are defined.
- Inventory management is important as it constitutes a significant part of current assets and requires considerable funds. Effective inventory management is needed to avoid unnecessary investment and improve long-term profitability.
- There are various techniques for inventory management including ABC analysis to classify inventory, setting stock levels like maximum, minimum, and average levels, economic order quantity formula to determine optimal order sizes, and safety stock to prevent stockouts.
- Inventory management aims to balance ordering costs, carrying costs, and stockout costs to minimize total costs through techniques like selective inventory control, reorder points, and application of computer systems for inventory tracking.
The document discusses various inventory management models and concepts. It begins with an overview of inventory types and functions. It then covers ABC analysis for classifying inventory, cycle counting to ensure accuracy, and models for determining order quantities like economic order quantity, production order quantity, and probabilistic models. The key models provide ways to determine how much and when to order inventory to minimize total costs based on factors like demand, ordering costs, and holding costs.
Inventory Management and Material Resource Planningsingh.the.hacker
This document discusses inventory management and material requirement planning. It begins by providing recommended textbooks on the topics. It then discusses the importance of inventory management for controlling manufacturing costs in India. Traditional manufacturing processes are discussed along with reasons for inventory problems. The Toyota Production System and its approach to eliminating waste is also summarized. Different types of inventories in manufacturing are defined. The document concludes by outlining the material requirement planning process, including exploding demand into a bill of materials and making make-or-buy decisions.
The document discusses inventory management concepts including definitions of inventory, inventory systems, types of inventory positions in the supply chain, reasons for holding inventory, and how inventory can add value through quality, speed, flexibility and cost. It also covers topics like designing inventory management systems, measuring inventory, balancing inventory levels, models for inventory management including economic order quantity and reorder point models, and classifying inventory using ABC analysis.
INVENTORY MODELS
One basic problem of
inventory management is to find
out the order quantity so that it
is most economical from overall operational point of view. Here that problem lies in minimizing the two conflicting costs, i.e. ordering cost and inventory carrying cost.
Inventory models help to find out the order quantity which minimizes the total costs(sum of ordering costs and inventory carrying costs).
This document discusses various inventory management concepts and techniques. It defines inventory as stored resources used to satisfy current or future needs, and identifies the main inventory types as raw materials, work in progress, and finished goods. It then discusses reasons for holding inventory, how to determine economic order quantities and reorder points, and assumptions of the economic order quantity and economic production quantity models. Finally, it briefly introduces different inventory classification systems like ABC analysis, HML classification, and XYZ classification that are used to categorize inventory items for better control and management.
The document discusses various inventory management concepts including types of inventory, inventory costs, inventory control systems, and ABC classification. It describes the economic order quantity (EOQ) model, which helps determine optimal order quantities to minimize total inventory costs given annual demand, ordering costs, and holding costs. The reorder point indicates when to place a new order based on daily demand, lead time, and a safety stock to protect against variability in demand.
This document discusses various inventory management techniques. It begins by defining inventory and inventory management. It then lists the objectives of inventory management and describes several tools used, including fixing maximum, minimum, re-order, and danger levels. Additional tools discussed include ABC analysis, EOQ, perpetual inventory systems, VED analysis, FSN analysis, and periodic inventory evaluation. The document also outlines various costs associated with inventory like financial, storage, price fluctuation, and obsolescence costs. Finally, it briefly describes several inventory management methods such as min-max, automatic order systems, just-in-time, ordering cycle, inventory turnover ratio, and input-output ratio analysis.
INVENTORY MANAGEMENT
TECHNIQUES OF INVENTORY CONTROL
ECONOMIC ORDERING QUANTITY (EOQ)
Maximum Stock Level
Minimum Stock Level
Danger Level
ABC ANALYSIS FOR VALUE OF ITEMS
Perpetual Inventory System
H.M.L. Classification
F S N Analysis
V.E.D. Classification
Just in Time (JIT)
Inventory Turnover Ratio
WORKING CAPITAL MANAGEMENT
RECEIVABLES MANAGEMENT
COSTS OF MAINTAINING RECEIVABLES
BENEFITS OF MAINTAINING RECEIVABLES
FACTORS AFFECTING THE SIZE OF RECEIVABLES
CREDIT PERIOD
OPTIMUM SIZE OF RECEIVABLES
DETERMINANTS OF CREDIT POLICY
OPTIMUM CREDIT POLICY
Credit standards
Credit terms
CREDIT EVALUATION
Economic Order Quantity (EOQ) is the order quantity that minimizes total inventory costs. Total Inventory Costs Budgetary techniques for inventory planning
2. A-B-C. System of inventory control
3. Economic Order Quantity (E.O.Q.) i.e., how much to purchase at one time economically
4. VED Analysis
5. Perpetual inventory system and the system of store verification
6. Fixation of Stock Level
7. Control Ratios
Inventory control is the processes employed to maximize a company's use of inventory & Depreciation is the systematic reduction in the recorded cost of a fixed asset.
This document provides an overview of material and labour cost control. It discusses material control techniques like ABC analysis, VED analysis, inventory levels, and economic order quantity. It describes the steps in material control like purchase requisition, selection of suppliers, and receipt of materials. Pricing methods for material issues like FIFO, LIFO, and average cost are explained. The document also covers labour cost elements like direct and indirect labour. It defines idle time and overtime, and discusses causes of idle time like administrative, productive and economic causes. Time rate and piece rate systems for labour remuneration are introduced.
This document discusses inventory control models and techniques for determining optimal order quantities and reorder points. The Economic Order Quantity (EOQ) model is introduced as a method to determine how much of an item to order to minimize total inventory costs. The EOQ model balances ordering costs and carrying costs. It assumes demand is known and constant. The Economic Production Quantity (EPQ) model extends the EOQ model to situations where inventory is produced rather than ordered. Safety stock models account for uncertain demand by holding extra inventory to prevent stockouts. ABC analysis classifies inventory items into important and less important groups.
- Inventory management involves determining order quantities and reorder points to balance inventory carrying costs and ordering costs.
- The economic order quantity (EOQ) formula calculates the optimal order size to minimize total costs. Safety stock is added to the reorder point to protect against demand uncertainty.
- Transportation rates and quantity discounts can impact the optimal order size compared to considering just inventory carrying and ordering costs. Larger orders may be preferable if transportation costs per unit are reduced for larger shipments.
This document discusses inventory management. It defines inventory as materials obtained in advance of need that are held until used or sold. There are different types of inventories like raw materials, work in process, finished goods, and spare parts. Inventory valuation involves determining quality and assigning values. Costs associated with inventory include purchasing, ordering, holding, and shortage costs. The economic order quantity formula balances ordering and holding costs. Inventory control aims to have the right materials in the right quantity at the lowest cost through policies, stock levels, lead times, and order sizes.
The document discusses inventory control and various inventory models. It describes the components of inventory costs, including purchase costs, order costs, holding costs, and unavailable costs. It then explains the economic order quantity (EOQ) model, which aims to minimize total inventory costs by balancing order and holding costs. The EOQ model and formulas for optimal order quantity, reorder cycle time, number of orders, and total costs are provided. Extensions of the EOQ model for quantity discounts and warehouse space constraints are also summarized.
Inventory management involves tracking and controlling a company's stock of raw materials, work-in-progress, and finished goods. Effective inventory management requires balancing inventory investment with customer service levels. Key aspects of inventory management include classifying inventory using techniques like ABC analysis, planning inventory needs using models like MRP, and controlling inventory through periodic or perpetual counting systems. The overall goal is meeting customer demand while minimizing total inventory costs.
Cost classifications are used for four main purposes: preparing external financial statements, predicting cost behavior, assigning costs to cost objects, and making decisions. For financial statements, costs are classified as either product costs (recognized as assets until goods are sold) or period costs (expensed in the period incurred). Direct costs can be traced to specific cost objects, while indirect costs cannot. Variable costs change with activity level, while fixed costs remain constant. Only differential costs that differ between alternatives are relevant for decision making.
This document discusses various techniques for inventory management and control. It begins by defining inventory and classifying it into different types such as raw materials, work in process, and finished goods. It then discusses the objectives of inventory control such as protecting against demand fluctuations and improving production economics. Several techniques for controlling inventory are described, including ABC analysis, economic order quantity modeling, VED analysis, perpetual inventory systems, and reviewing slow-moving items. ABC analysis involves categorizing inventory into A, B, and C classes based on value and prioritizing control efforts accordingly. The document provides examples of how these techniques can be applied to manage inventory effectively.
This document provides an overview of inventory management models and concepts. It discusses the basic economic order quantity (EOQ) model, which determines the optimal order quantity to minimize total costs. The reorder point model is also introduced, which determines when to place orders based on expected demand during lead time. Fixed period review systems that place orders at set intervals are covered. Continuous review systems are also summarized, which use a reorder point policy to trigger orders of a fixed quantity when inventory falls below that level. Key assumptions and variables in inventory models like demand, lead time, ordering and holding costs are defined.
- Inventory management is important as it constitutes a significant part of current assets and requires considerable funds. Effective inventory management is needed to avoid unnecessary investment and improve long-term profitability.
- There are various techniques for inventory management including ABC analysis to classify inventory, setting stock levels like maximum, minimum, and average levels, economic order quantity formula to determine optimal order sizes, and safety stock to prevent stockouts.
- Inventory management aims to balance ordering costs, carrying costs, and stockout costs to minimize total costs through techniques like selective inventory control, reorder points, and application of computer systems for inventory tracking.
The document discusses various inventory management models and concepts. It begins with an overview of inventory types and functions. It then covers ABC analysis for classifying inventory, cycle counting to ensure accuracy, and models for determining order quantities like economic order quantity, production order quantity, and probabilistic models. The key models provide ways to determine how much and when to order inventory to minimize total costs based on factors like demand, ordering costs, and holding costs.
Inventory Management and Material Resource Planningsingh.the.hacker
This document discusses inventory management and material requirement planning. It begins by providing recommended textbooks on the topics. It then discusses the importance of inventory management for controlling manufacturing costs in India. Traditional manufacturing processes are discussed along with reasons for inventory problems. The Toyota Production System and its approach to eliminating waste is also summarized. Different types of inventories in manufacturing are defined. The document concludes by outlining the material requirement planning process, including exploding demand into a bill of materials and making make-or-buy decisions.
The document discusses inventory management concepts including definitions of inventory, inventory systems, types of inventory positions in the supply chain, reasons for holding inventory, and how inventory can add value through quality, speed, flexibility and cost. It also covers topics like designing inventory management systems, measuring inventory, balancing inventory levels, models for inventory management including economic order quantity and reorder point models, and classifying inventory using ABC analysis.
INVENTORY MODELS
One basic problem of
inventory management is to find
out the order quantity so that it
is most economical from overall operational point of view. Here that problem lies in minimizing the two conflicting costs, i.e. ordering cost and inventory carrying cost.
Inventory models help to find out the order quantity which minimizes the total costs(sum of ordering costs and inventory carrying costs).
This document discusses various inventory management concepts and techniques. It defines inventory as stored resources used to satisfy current or future needs, and identifies the main inventory types as raw materials, work in progress, and finished goods. It then discusses reasons for holding inventory, how to determine economic order quantities and reorder points, and assumptions of the economic order quantity and economic production quantity models. Finally, it briefly introduces different inventory classification systems like ABC analysis, HML classification, and XYZ classification that are used to categorize inventory items for better control and management.
The document discusses various inventory management concepts including types of inventory, inventory costs, inventory control systems, and ABC classification. It describes the economic order quantity (EOQ) model, which helps determine optimal order quantities to minimize total inventory costs given annual demand, ordering costs, and holding costs. The reorder point indicates when to place a new order based on daily demand, lead time, and a safety stock to protect against variability in demand.
This document discusses various inventory management techniques. It begins by defining inventory and inventory management. It then lists the objectives of inventory management and describes several tools used, including fixing maximum, minimum, re-order, and danger levels. Additional tools discussed include ABC analysis, EOQ, perpetual inventory systems, VED analysis, FSN analysis, and periodic inventory evaluation. The document also outlines various costs associated with inventory like financial, storage, price fluctuation, and obsolescence costs. Finally, it briefly describes several inventory management methods such as min-max, automatic order systems, just-in-time, ordering cycle, inventory turnover ratio, and input-output ratio analysis.
INVENTORY MANAGEMENT
TECHNIQUES OF INVENTORY CONTROL
ECONOMIC ORDERING QUANTITY (EOQ)
Maximum Stock Level
Minimum Stock Level
Danger Level
ABC ANALYSIS FOR VALUE OF ITEMS
Perpetual Inventory System
H.M.L. Classification
F S N Analysis
V.E.D. Classification
Just in Time (JIT)
Inventory Turnover Ratio
WORKING CAPITAL MANAGEMENT
RECEIVABLES MANAGEMENT
COSTS OF MAINTAINING RECEIVABLES
BENEFITS OF MAINTAINING RECEIVABLES
FACTORS AFFECTING THE SIZE OF RECEIVABLES
CREDIT PERIOD
OPTIMUM SIZE OF RECEIVABLES
DETERMINANTS OF CREDIT POLICY
OPTIMUM CREDIT POLICY
Credit standards
Credit terms
CREDIT EVALUATION
Economic Order Quantity (EOQ) is the order quantity that minimizes total inventory costs. Total Inventory Costs Budgetary techniques for inventory planning
2. A-B-C. System of inventory control
3. Economic Order Quantity (E.O.Q.) i.e., how much to purchase at one time economically
4. VED Analysis
5. Perpetual inventory system and the system of store verification
6. Fixation of Stock Level
7. Control Ratios
Inventory management involves controlling the ordering, storage, and use of components and finished goods. It represents a major investment for businesses. [1] Techniques for effective inventory management include determining stock levels like reordering levels and minimum/maximum amounts based on consumption rates and lead times. [2] Safety stocks are amounts held above requirements to prevent stock-outs during lead times. [3] Economic order quantity models determine optimal order sizes by balancing ordering and carrying costs.
This document discusses various aspects of inventory management including classification of inventory, objectives of inventory control, costs associated with inventory, different inventory categories, selective inventory control methods, reorder quantity determination, and economic order quantity calculation. Key concepts covered include direct and indirect inventory, aims of minimizing costs while avoiding stockouts, and classification systems to focus control efforts.
Inventory control techniques include ABC analysis, economic order quantity, perpetual inventory systems, reviewing slow and non-moving items, setting inventory levels, material budgeting, effective purchasing procedures, and scrap/surplus disposal. The document discusses these techniques in detail, providing examples and explaining how they help manage inventory levels and costs. ABC analysis prioritizes inventory items based on value and consumption to focus control efforts. Economic order quantity calculates optimal order sizes. Perpetual inventory systems facilitate ongoing inventory tracking.
Cost accounting is the process of tracking and recording costs related to manufacturing or producing goods and services. It helps determine the actual costs of production and allows for cost control and cost reduction. The key objectives of cost accounting are cost ascertainment, fixation of selling prices, cost control, matching costs with revenues, and preparation of financial statements. Proper material control and purchase control are important aspects of cost accounting that help ensure the right quality and quantity of materials are procured at optimal prices and stored efficiently.
The document discusses materials costing and control. It defines direct and indirect materials and explains how materials are accounted for as they move through the production process. It also covers determining the optimal purchase quantity to minimize total inventory costs, identifying stock losses through periodic stocktaking, and accounting for discrepancies between physical and book stock values.
Inventory control techniques include ABC analysis, economic order quantity (EOQ), perpetual inventory system, review of slow and non-moving items, input-output ratio analysis, and setting various inventory levels. EOQ determines the optimal order quantity to minimize total inventory costs. Perpetual inventory involves continuously updating inventory records as items are received or used to prevent closing down for stocktaking. Input-output ratio analysis examines the relationship between raw materials used and final outputs. Setting inventory levels such as maximum, minimum, reorder helps maintain appropriate stock levels.
Material control is a system that ensures the efficient procurement, storage, and use of materials. It aims to provide the right quality and quantity of materials at the minimum possible cost. Key aspects of material control include establishing stock levels to prevent understocking or overstocking, using economic order quantities to minimize purchasing costs, and implementing inventory tracking systems. Techniques like ABC analysis prioritize materials based on value and VED analysis categorizes spare parts based on criticality to operations. Material control helps ensure uninterrupted production while optimizing investment in inventory.
This document discusses material control and inventory management. It defines key terms like materials, inventory, and different stock levels. It describes the objectives and operations of material control like purchasing, inspection, and storage of materials. Methods to determine economic order quantity, set stock levels like reorder point, minimum and maximum levels are presented. Documentation for material procurement, storage, and issuance are covered. Pricing methods for materials issued like FIFO, LIFO, simple average and weighted average are also summarized.
This document discusses various inventory control techniques used in pharmaceutical companies. It describes ABC analysis which divides inventory items into three categories based on their value and consumption. High-value items that consume most of the budget are category A and require strict control. Economic order quantity technique is used to determine optimal order quantities to minimize total costs. Perpetual inventory system continuously records receipts and issues to facilitate regular checking. Slow-moving and obsolete items are periodically reviewed. Input-output ratio analysis relates raw materials used to final outputs. Maintaining proper inventory control is important for smooth operations and maximum profitability.
Inventory control is the process of measuring and regulating inventory according to predetermined norms like economic order quantity to reduce costs. It aims to balance ordering, holding, and shortage costs. Key aspects of inventory control include classifying items using ABC analysis based on annual consumption value, determining reorder points and levels, and maintaining safety stocks to account for demand fluctuations and lead time uncertainties. The economic order quantity model calculates the optimal order size to minimize total annual inventory costs.
This document discusses key concepts of effective inventory management and control. It begins by outlining different inventory control methods like periodic review, re-order points, and perpetual inventory systems. It then discusses ABC analysis for classifying inventory items. The document provides definitions and explanations of concepts like economic order quantity, re-order level, safety stock, and techniques for determining order quantities. It evaluates costs associated with inventory like ordering costs and carrying costs. The purpose of inventory management and control is to minimize total inventory costs.
“Cost accounting is Accounting for costs classifiction and analysis of expenditure as will enable the total cost of any particular unit of production to be ascertained with reasonable degree of accuracy and at the same time to disclose exactly how much total cost is constituted
The document discusses various aspects of production management including definitions, objectives, and key functions. Production management aims to produce quality products according to specifications, on schedule, and at minimum cost. It involves planning and regulating the transformation of raw materials into finished goods. Key aspects of production management include material management, cost control, and operational management. Material management involves inventory control and purchase functions. Cost control focuses on labor and material costs. Effective production management is essential for business success.
I. A biscuit manufacturing company buys 10,000 bags of wheat annually. The cost per bag is Rs. 500 and ordering cost is Rs. 400. Inventory carrying cost is estimated at 10% of wheat price. The number of orders to be placed during the year is calculated.
II. An automobile workshop's annual demand for shock absorbers is 4800 units. Unit price is Rs 300. Ordering cost is Rs 50. Storage cost is 3% annually and interest rate is 15%. The EOQ and number of orders are calculated.
III. Given data on normal usage, minimum usage, maximum usage and lead time for a component, reorder level, maximum inventory level and minimum inventory level are calculated.
hey friends, we know from earlier research that material control is the major component of cost. so, let us have a look at few tenchniques relating to material control
The document discusses different types of inventory levels and classifications including wastage, scrap, spoilage, defectives, maximum level, minimum level, reorder level, danger level, ABC analysis, VED analysis, economic order quantity, and different inventory counting methods like annual stock taking and continuous stock taking. It provides definitions and differences between wastage, scrap, spoilage, and defectives. It also explains the purpose and factors considered for setting different inventory levels.
How to Setup Warehouse & Location in Odoo 17 InventoryCeline George
In this slide, we'll explore how to set up warehouses and locations in Odoo 17 Inventory. This will help us manage our stock effectively, track inventory levels, and streamline warehouse operations.
A review of the growth of the Israel Genealogy Research Association Database Collection for the last 12 months. Our collection is now passed the 3 million mark and still growing. See which archives have contributed the most. See the different types of records we have, and which years have had records added. You can also see what we have for the future.
How to Build a Module in Odoo 17 Using the Scaffold MethodCeline George
Odoo provides an option for creating a module by using a single line command. By using this command the user can make a whole structure of a module. It is very easy for a beginner to make a module. There is no need to make each file manually. This slide will show how to create a module using the scaffold method.
Chapter wise All Notes of First year Basic Civil Engineering.pptxDenish Jangid
Chapter wise All Notes of First year Basic Civil Engineering
Syllabus
Chapter-1
Introduction to objective, scope and outcome the subject
Chapter 2
Introduction: Scope and Specialization of Civil Engineering, Role of civil Engineer in Society, Impact of infrastructural development on economy of country.
Chapter 3
Surveying: Object Principles & Types of Surveying; Site Plans, Plans & Maps; Scales & Unit of different Measurements.
Linear Measurements: Instruments used. Linear Measurement by Tape, Ranging out Survey Lines and overcoming Obstructions; Measurements on sloping ground; Tape corrections, conventional symbols. Angular Measurements: Instruments used; Introduction to Compass Surveying, Bearings and Longitude & Latitude of a Line, Introduction to total station.
Levelling: Instrument used Object of levelling, Methods of levelling in brief, and Contour maps.
Chapter 4
Buildings: Selection of site for Buildings, Layout of Building Plan, Types of buildings, Plinth area, carpet area, floor space index, Introduction to building byelaws, concept of sun light & ventilation. Components of Buildings & their functions, Basic concept of R.C.C., Introduction to types of foundation
Chapter 5
Transportation: Introduction to Transportation Engineering; Traffic and Road Safety: Types and Characteristics of Various Modes of Transportation; Various Road Traffic Signs, Causes of Accidents and Road Safety Measures.
Chapter 6
Environmental Engineering: Environmental Pollution, Environmental Acts and Regulations, Functional Concepts of Ecology, Basics of Species, Biodiversity, Ecosystem, Hydrological Cycle; Chemical Cycles: Carbon, Nitrogen & Phosphorus; Energy Flow in Ecosystems.
Water Pollution: Water Quality standards, Introduction to Treatment & Disposal of Waste Water. Reuse and Saving of Water, Rain Water Harvesting. Solid Waste Management: Classification of Solid Waste, Collection, Transportation and Disposal of Solid. Recycling of Solid Waste: Energy Recovery, Sanitary Landfill, On-Site Sanitation. Air & Noise Pollution: Primary and Secondary air pollutants, Harmful effects of Air Pollution, Control of Air Pollution. . Noise Pollution Harmful Effects of noise pollution, control of noise pollution, Global warming & Climate Change, Ozone depletion, Greenhouse effect
Text Books:
1. Palancharmy, Basic Civil Engineering, McGraw Hill publishers.
2. Satheesh Gopi, Basic Civil Engineering, Pearson Publishers.
3. Ketki Rangwala Dalal, Essentials of Civil Engineering, Charotar Publishing House.
4. BCP, Surveying volume 1
বাংলাদেশের অর্থনৈতিক সমীক্ষা ২০২৪ [Bangladesh Economic Review 2024 Bangla.pdf] কম্পিউটার , ট্যাব ও স্মার্ট ফোন ভার্সন সহ সম্পূর্ণ বাংলা ই-বুক বা pdf বই " সুচিপত্র ...বুকমার্ক মেনু 🔖 ও হাইপার লিংক মেনু 📝👆 যুক্ত ..
আমাদের সবার জন্য খুব খুব গুরুত্বপূর্ণ একটি বই ..বিসিএস, ব্যাংক, ইউনিভার্সিটি ভর্তি ও যে কোন প্রতিযোগিতা মূলক পরীক্ষার জন্য এর খুব ইম্পরট্যান্ট একটি বিষয় ...তাছাড়া বাংলাদেশের সাম্প্রতিক যে কোন ডাটা বা তথ্য এই বইতে পাবেন ...
তাই একজন নাগরিক হিসাবে এই তথ্য গুলো আপনার জানা প্রয়োজন ...।
বিসিএস ও ব্যাংক এর লিখিত পরীক্ষা ...+এছাড়া মাধ্যমিক ও উচ্চমাধ্যমিকের স্টুডেন্টদের জন্য অনেক কাজে আসবে ...
Main Java[All of the Base Concepts}.docxadhitya5119
This is part 1 of my Java Learning Journey. This Contains Custom methods, classes, constructors, packages, multithreading , try- catch block, finally block and more.
Walmart Business+ and Spark Good for Nonprofits.pdfTechSoup
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You will hear from Liz Willett, the Head of Nonprofits, and hear about what Walmart is doing to help nonprofits, including Walmart Business and Spark Good. Walmart Business+ is a new offer for nonprofits that offers discounts and also streamlines nonprofits order and expense tracking, saving time and money.
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Answers about how you can do more with Walmart!"
ISO/IEC 27001, ISO/IEC 42001, and GDPR: Best Practices for Implementation and...PECB
Denis is a dynamic and results-driven Chief Information Officer (CIO) with a distinguished career spanning information systems analysis and technical project management. With a proven track record of spearheading the design and delivery of cutting-edge Information Management solutions, he has consistently elevated business operations, streamlined reporting functions, and maximized process efficiency.
Certified as an ISO/IEC 27001: Information Security Management Systems (ISMS) Lead Implementer, Data Protection Officer, and Cyber Risks Analyst, Denis brings a heightened focus on data security, privacy, and cyber resilience to every endeavor.
His expertise extends across a diverse spectrum of reporting, database, and web development applications, underpinned by an exceptional grasp of data storage and virtualization technologies. His proficiency in application testing, database administration, and data cleansing ensures seamless execution of complex projects.
What sets Denis apart is his comprehensive understanding of Business and Systems Analysis technologies, honed through involvement in all phases of the Software Development Lifecycle (SDLC). From meticulous requirements gathering to precise analysis, innovative design, rigorous development, thorough testing, and successful implementation, he has consistently delivered exceptional results.
Throughout his career, he has taken on multifaceted roles, from leading technical project management teams to owning solutions that drive operational excellence. His conscientious and proactive approach is unwavering, whether he is working independently or collaboratively within a team. His ability to connect with colleagues on a personal level underscores his commitment to fostering a harmonious and productive workplace environment.
Date: May 29, 2024
Tags: Information Security, ISO/IEC 27001, ISO/IEC 42001, Artificial Intelligence, GDPR
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it describes the bony anatomy including the femoral head , acetabulum, labrum . also discusses the capsule , ligaments . muscle that act on the hip joint and the range of motion are outlined. factors affecting hip joint stability and weight transmission through the joint are summarized.
LAND USE LAND COVER AND NDVI OF MIRZAPUR DISTRICT, UPRAHUL
This Dissertation explores the particular circumstances of Mirzapur, a region located in the
core of India. Mirzapur, with its varied terrains and abundant biodiversity, offers an optimal
environment for investigating the changes in vegetation cover dynamics. Our study utilizes
advanced technologies such as GIS (Geographic Information Systems) and Remote sensing to
analyze the transformations that have taken place over the course of a decade.
The complex relationship between human activities and the environment has been the focus
of extensive research and worry. As the global community grapples with swift urbanization,
population expansion, and economic progress, the effects on natural ecosystems are becoming
more evident. A crucial element of this impact is the alteration of vegetation cover, which plays a
significant role in maintaining the ecological equilibrium of our planet.Land serves as the foundation for all human activities and provides the necessary materials for
these activities. As the most crucial natural resource, its utilization by humans results in different
'Land uses,' which are determined by both human activities and the physical characteristics of the
land.
The utilization of land is impacted by human needs and environmental factors. In countries
like India, rapid population growth and the emphasis on extensive resource exploitation can lead
to significant land degradation, adversely affecting the region's land cover.
Therefore, human intervention has significantly influenced land use patterns over many
centuries, evolving its structure over time and space. In the present era, these changes have
accelerated due to factors such as agriculture and urbanization. Information regarding land use and
cover is essential for various planning and management tasks related to the Earth's surface,
providing crucial environmental data for scientific, resource management, policy purposes, and
diverse human activities.
Accurate understanding of land use and cover is imperative for the development planning
of any area. Consequently, a wide range of professionals, including earth system scientists, land
and water managers, and urban planners, are interested in obtaining data on land use and cover
changes, conversion trends, and other related patterns. The spatial dimensions of land use and
cover support policymakers and scientists in making well-informed decisions, as alterations in
these patterns indicate shifts in economic and social conditions. Monitoring such changes with the
help of Advanced technologies like Remote Sensing and Geographic Information Systems is
crucial for coordinated efforts across different administrative levels. Advanced technologies like
Remote Sensing and Geographic Information Systems
9
Changes in vegetation cover refer to variations in the distribution, composition, and overall
structure of plant communities across different temporal and spatial scales. These changes can
occur natural.
Exploiting Artificial Intelligence for Empowering Researchers and Faculty, In...Dr. Vinod Kumar Kanvaria
Exploiting Artificial Intelligence for Empowering Researchers and Faculty,
International FDP on Fundamentals of Research in Social Sciences
at Integral University, Lucknow, 06.06.2024
By Dr. Vinod Kumar Kanvaria
Strategies for Effective Upskilling is a presentation by Chinwendu Peace in a Your Skill Boost Masterclass organisation by the Excellence Foundation for South Sudan on 08th and 09th June 2024 from 1 PM to 3 PM on each day.
2. Definition
The term cost has a variety of meaning according to the context. In
common parlance, cost refers to the price of a product . But in management
terminology ,cost refers to expenditure . “The Institute of Cost and
Management Accountants ,(ICMA) London defines Cost as “the amount of
expenditure incurred on a giving things”.
Cost Accounting
Cost Accounting is the process of classifying recording allocating and
reporting the various costs incurred in the operation of an enterprise.
`` The words costing and cost accounting are used interchangeably .
But they do not mean the same thing . Costing denotes the techniques and
process of ascertaining cost . It can be carried out arithmetically . But cost
accounting is a formal system established for recording costs in the books of
accounts.
3. The objectives of cost accounting
The major objectives of cost accounting are cost ascertainment ,
finishing of cit data for decision making and control of cost. The
objectives are listed below:
To find out the total cost and cost per unit of various
products manufactured;
To disclose the proportion of different element (such as
material, labour and overload) in the total cost;
To provide necessary data for fixing the selling price;
To ascertain the profitability of cash product and advise
the management as to how these profits can be
maximized;
To supply estimates of cost ,on the basis of historical data
, for the preparation of tenders, qutations,etc.,;
4. Financial Accounting
Data used: only monetary
data are used .
Periodicity of reporting :
it reports operating
results and financial
position at the end of the
year.
Scope: it deals with
actual facts and figures
Stock valuation : stock
are valued at cost price
or market price
whichever is less
Analysis of cost &profit
:it shows the overall
profit and loss of the
organization
Cost Accounting
Both monetary and
non –monetary (units)
data are used.
It give information to
the management as
and when required.
It deals with facts as
well as estimates.
Stock are valued at
cost
It shows the detailed
cost and profit of each
products, job or
process.
Difference between Financial Accounting and Cost Accounting
5. Cost -elements classification and methods
The various elements of cost
Total cost of a product is composed of three elements
a. Material b. labour and c. expenses. Each of these
elements army be further divided into two parts – direct
and indirect costs
Direct cost:
Direct costs are those costs which can be identified
with and allocated directly to a particular products,
process or job. These costs are known as prime cost
Indirect cost:
indirect costs are those costs which cannot be
allocated but can be apportioned to it absorbed by a
particular product, process or job. These costs are known
as overheads.
6.
7. Materials
The term material means and includes raw materials,
spares parts and components, factory supplies, packing
materials etc.,
from the definition it is clear that the material control
involves efficient functioning of the following
operations:
a. Purchasing material
b. Receiving material
c. Inspection of materials
d. Storage of materials
e. Issusing of materials
f. Maintenance of inventory records
g. Stock audit
8. Objectives of materials control:
Material control aims at achieving savings
in material cost ,improvement in material
handling, increased production and avoidance
of over investment or under investment in
inventories. The important objectives of
material control are:
a. To make available the right type of raw
material at the right time in order to have
smooth and continuous flow of production.
b. To ensure effective utilisation of material;
9. Advantage of Material Control:
It help to eliminate or minimize waste
through control of purchase, storage and
issue of materials.
It facilitate detection and elimination of
fraud and pilferage by implementing stock
control measures.
It ensures up- to date maintenance of stock
records.
It avoid over investment in inventories.
10. BIN CARD
Bin a place ,rack or cupboard where materials are kept
. A card is attached to each bin to show the position of stock in
the bin . This card is known as bin card or stores card.
Name of the material minimum level
Material code no maximum level
Bin no re-order level
Stores ledger folio no re –order quantity
receipts issuse Balance
date Goods
receiv
ed
note
no
qty Requis
ition
no
qty qty remar
ks
11. Advantage of Bin card:
1. It enables the stores –keeper to receipts and
issues of materials and keep the stocks within the
minimum and maximum levels.
2. It provides up to date record of materials
received and balance in stocks .this helps in the
successful operation of a perpetural inventory
system.
3. By seeing the bin card, the store-keeper can
send the material requisition for the purchase of
materials in time.
12. Stores Ledger:
stores ledger is kept in the costing
department .It contains accounts for each class
of material, it is usually maintained in the loose
leaf form.
Name of the material: Minimum level:
Code number: Maximum level:
Description: Re-order level
Re-order quantity
14. Bill of Materials:
A bill of material gives a complete list of
material required for a particular job or work order. It
is generally prepared by the planning department as
soon as the work order is received .
Advantage :
1. A bill of material is kind of written autorization
to the store –keeper for issue of materials.
2. Its serves as a purchase requizition to the
purchase department.
3. It is possible to calculate the material cost of all
articles before they are produced.
16. Bin card Store ledger
It is maintained by the
store- keeper
It is a record of
quantities only
Entries are made at the
time when the
transaction takes place.
It is attached to the bin
Each transaction is
individually posted
It is maintained by the cost
accounting department
It is a record of quantities
as well as values
Entries are made only after
the transaction has taken
place.
It is kept in the cost office
Transaction may be
summarised and posted
periodically.
17. ABC analysis
Efficient store- keeper requries sufficient
control over all items of stores. However, greater care
is necessary in the case of costlier item. Therefore
,ABC analysis envisage varied degree of care and
control for different categories of materials, according
to their value. Hence, it is known as selective value
approach. It is also referred to as Always Better
Control system.
Category A – High value materials
Category B - Medium value materials
Category C - Low value materials
18. 1. It ensures closer and stricter control on
costly items in which large amount of
capital has been invested.
2.Management time is saved since attention
is paid only to some of the items having more
value.
3. Investment in inventory can be regulated
and funds can be utilised in the best possible
manner.
19. Maximum level
This is the level above which the stock should not be
level above allowed to exceed at any time. This is fixed by
taking into account the following factors:
Availability of capital
Storage space available
Seasonal price fluctuation
The cost of maintenance
Economic order quantity.
Maximum level formula :
Maximum level=re order level+ re order qty-
(min.cons*min.re order period)
20. Minimum level
This is the level below which stock should not
be allowed to fall at any time .
a) Rate of consumption of materials
b) Time required to obtain fresh supply of materials
c) Re-order level.
Minimum level formula:
minimum level = Re-order level-(Normal
consumption x Normal Re-order period)
21. Re order level:
This is the level at which a new order for
material is to be placed by the store –keeper. In other
words, this is the level at which a purchase requisition
is made out.
a) Rate of consumption of material
b) Minimum level
c) Delivery time
d) Variation in delivery time
Reorder level formula:
Re order level=maximum consumption*maximum re
order period
22. Economic Order Quantity : [EOQ]
It is not a stock level. It is ideal quantity
material to be purchased at any time . If purchase are
made of purchase are made in large quantity ,the cost
of holding the stock will be higher but the cost of
purchasing would be less.
Formula
EOQ=√2AO
C
A= Annual consumption in units
O=Ordering and receiving cost per order
C=Cost of carrying inventory per unit per annum
23. Danger level:
This is fixed below minimum level.When the stock
reaches this level, urgent action for purchase of material is
taken.
Formula:
Danger level = min. rate of consumption x Emergency
delivery time .
Average stock level :
This is level indicates the average stock held by
the firm. It is calculated as follows:
Formula:
Minimum level+1/2 of Re-order quantity
(or)
Maximum level+ Minimum level
2
24. First in first our method (FIFO)
under this is method ,materials are issued in
the order in which they are received in the store. It
means that the materials received first will be issued
first.
Advantage:
a) This method is simple to understand and easy to
operate.
b) The closing stock is valued at the current market
price.
c) Deterioration and obsolescence can be avoided.
25. Disadvantages:
a. When prices fluctuate, calculation becomes
complicated. This increases the possibility of
electrical errors.
b. During the period of price fluctuation,
Material charged to jobs vary.
Therefore,comparison between jobs is
difficult.
c. During the period of rising prices, product
costs are under stated and profits are
overstated. This may result in payment of
higher dividend out of capital.
26. Last In First out Method (LIFO)
This method is opposite to FIFO . Here materials last
are issued first . Issues are made from the latest
purchase.
Advantages:
a. Issues are based on actual cost.
b. Issues price reflects current market price.
c. There is no unrealised profit or loss.
d. Simple to operate if purchases are not many and
prices are steady or rising.
27. Disadvantage:
a. This method involves considerable clerical work.
b. Stock of material shown in the balance sheet will
not reflect market price.
c. This method is not accepted by the income tax
authorities.
d. Under falling prices, issues are period at lower
prices and stocks are valued at higher rates.
e. Due to variation in prices, comparison of cost of
similar jobs is difficult.
28. Each business concern usually maintains a
minimum quantity of material in stock. This
minimum quantity is known as base stock.
This stock will be used only when an
emergency arises. This base stock is
considered to be a fixed asset valued at cost
price irrespective of the price fluctuations.
This quantity in excess of this stock may be
valued either by using FIFO or LIFO Method.
Base Stock Method is not an independent
method.
29. The simple average is determined by adding
different prices of materials in stock and dividing
the total by number of prices. Quantity
purchased in each lot is ignored.
Advantages:
1.This method is simple to understand and easy
to operate.
2. It reduces clerical work.
Disadvantages:
1. It does not take into account the quantities
purchased.
2. The value of costing stock becomes
unrealistic.
30. This method takes into account both quantity
and price for arriving at the average price.
The weighted average is obtained by dividing
the total cost of material in the stock by
total quantity of material in the stock.
Advantages:
It gives more accurate results than simple
average price because it considers both
quantity as well as price.
It is suitable in the case of materials subject
to wide price fluctuations.
31. Disadvantages:
1. Stock on hand does not represent current
market price.
2. When large number of purchases are made
at different rates, the calculation is tedious.
So, there are more chances of clerical error.
3. With some approximation in average
price, there will be profit or loss due to over
or under charging of material cost of jobs.