This document discusses techniques for material control. It defines material control as controlling the cost of materials, which typically represent 64% of total production costs. It discusses establishing reorder levels between a minimum and maximum, with the minimum being a safety stock. The reorder quantity should not exceed the maximum stock level and economic order quantity is used to reduce carrying and ordering costs. ABC analysis categorizes materials into groups for inventory control based on value and usage. Perpetual inventory records are maintained through techniques like bin cards and ledger entries.

1. TECHNIQUES OF
MATERIAL CONTROL
NAME - Divyanshu Khurana
ROLL NO. - 095

2.  Most important factor of production.
 64% of total cost represented by cost of
material.
 Control over material necessary to have
control over cost of product.
 Material control – Definition.

3.  REORDERING LEVEL – Level between
minimum and maximum level.
 MINIMUM LEVEL also known as ‘safety
stock’ because if stock goes below this level
production maybe held for material wants.
 MAXIMUM LEVEL – a level beyond which
stock should not be maintained.

4.  Material quantity ordered at one time.
 Reorder quantity should not exceed the
maximum stock level.
 EOQ to be fixed in a manner to reduce
carrying and ordering costs.
 Carrying costs – cost of holding inventory in the
store.
 Ordering costs – cost of placing an order for
purchase of materials.

5.  Material turnover – movement of material in
an organization.
 It is important to compare turnover of
different kinds of material.
 High turnover ratio – fast moving stock
 Low turnover ratio – slow moving stock

6.  ABC analysis also known as always better
control method.
 The technique is divided in three categories :-
 Category A – high priced items.
 Category B – medium priced items.
 Category C – low priced items.

7.  Perpetual inventory records i.e. bin cards and
stores ledger are maintained in this system.
 Continuous stock taking – physical
verification of stock records with actual
records.