The document explains the need for inventory control, emphasizing its importance in ensuring continuous supply, proper investment, cost minimization, loss reduction, and avoiding duplication of orders. It details various inventory control techniques such as ABC analysis, HML classification, and EOQ model, highlighting their roles in managing stock efficiently. Additionally, it outlines different classifications of inventory based on movement speed and value, assisting in effective decision-making regarding purchases and inventory management.

1. INVENTORY
INVENTORY
CONTROL
CONTROL
Explained By:
Sarbjit Kaur.
Lecturer, Department of Computer Application,
PGG.C.G., Sector: 42, Chandigarh

2. NEED OF INVENTORY
NEED OF INVENTORY
CONTROL
CONTROL
 TO ENSURE CONTINUOUS SUPPLY : IT IS
REQURIED SO THAT PRODUCUTION
SHOULD NOT SUFFER AT ANT TIME AND
THE CUSTOMERS DEMAND SHOULD ALSO
BE MET
 TO ENSURE PROPER INVESTMENT :
THERE SHOULD BE NO OVERSTOCKING
AND UNDERSTOCKING AND INVETORY
CONTROL HELP IN IT.

3. CONT’D
CONT’D
 TOREDUSE THE MATERIAL COSTS: A
GOOD INVENTORY CONTROL SYSTEM
CAN LEAD TO MINIMIZATION OF MATERIAL
COST.
 TO MINIMIZE LOSSES: IT CAN MINIMIZE
THE LOSSES OF INVENTORY THROUGH
DETERIORATION WASTAGES AND
DAMAGES.
 TO ELIMINATE DUPLICATION : THE SAME
MATERIAL CAN BE ORDERED BY
DIFFERENT PERSON SO BY INVENTORY
CONTROL AVOID THIS PROBLEM.

4. TECHNIQUES OF INVENTORY
TECHNIQUES OF INVENTORY
CONTROL
CONTROL
 ABC ANALYSIS
 VED ANALYSIS
 AGEING ANALYSIS
 FNSD ANALYSIS
 HML ANALYSIS
 XYZ ANALYSIS
 SOS ANALYSIS
 PREPECTUAL INVENTORY SYSTEM
 ECONOMIC ORDER QUANTITY

5. PREPECTUAL INVENTORY
PREPECTUAL INVENTORY
SYSTEM
SYSTEM
 A SYSTEM OF RECORDS MAINTAINED
BY THE CONTROLLING DEPARTMENT,
WHICH REFLECTS THE PHYSICAL
MOVEMENTS OF THE STOCK AND
THERE CURRENT BALANCE.
 THIS SYSTEM MAKES USE OF
EXTENSIVE RECORDS ,RECIPETS,
ISSUSES ,RETURNS ETC. OF MATERIALS
ARE RECORDED IN A CONTINUOUS
BASIS IN A SORED DEPARTMENT.

6. FNSD ANALYSIS
FNSD ANALYSIS
 F-FAST MOVING ITEMS IN INVENTORYARE
THOSE ITEMS WHICH ARE CONSUMED
WITHIN A SHORT PERIOD OF TIME
 N-NORMAL MOVING ITEMS ARE THOSE
WHICH ARE CONSUMED WITHIN A YEAR .
 S-SLOW MOVING ITEMS ARE THOSE
STOCKS WHICH HAVE A LOW TURNOVER
RATE.
 D-DEAD ITEMS DENOTES TO THAT STOCK
FOR WHICH NO PRESENT DEMAND EXIST
AND NO FORECAST CAN BE MADE OF
FUTURE DEMAND.

7. HML CLASSIFICATION
HML CLASSIFICATION
 H-HIGH VALUE ITEMS
 M-MEDIUM VALUE ITEMS
 L-LOW VALUE ITEMS
 IT IS USEFUL FOR KEEPING CONTROL OVER
MATERIALS CONSUMPTION AT THE
DEPARTMENT LEVEL.
 XYZ CLASSIFICATION IN THIS THE ITEMS
HAVING HIGHEST INVENTORY ARE
CLASSIFIED AS X, AND WITH LOW
INVESTMENT IN THEM TERMED AS Z
ITEMS,OTHER ITEMS ARE Y WHOZ
INVENTORY IS NITHER TOO HIGH OR LOW

8. SOS CLASSIFICATION
SOS CLASSIFICATION
 S- SEASONAL ITEMS
 OS- OF SEASONAL ITEMS
 IT IS USEFUL FOR DECIDING THE
TIME OF PURCHASE , SO THAT
THE COST OF MATERIAL AND
HOLDING COST MAY B BALANCED.

9. ABC Analysis
ABC Analysis
Any stock is segregated into different sections.
These items are classified into 3 sections, A, B
and C. The logic of segregating these items
into sections is that section A consists of
limited number of items that are very
expensive. Section B has items that are not
expensive and the number of units that is to be
ordered is also not very large. The section C
consists of numerous items, that have a low
monetary value

10. Economic Order Quantity :
Economic Order Quantity :
 Different models take different costs into account.
One of the popular model developed for items of
repetitive nature (dynamic), future demands for
which can be projected with certainty is Economic
Order Quantity (EOQ) model.
◦ In addition to factors mentioned above, this
model assumes that price of the material remains
constant with time and also does not vary with
order quantity. This model can be developed
mathematically by differentiating total cost of with
respect to Quantity. The formula so derived is
given below :
◦ E.O.Q=