The document discusses inventory management and control in production and material management, emphasizing its importance due to high costs associated with inventory. It outlines the functions of inventory, steps in the inventory management process, and various selective control techniques such as ABC analysis and material requirements planning (MRP). Additionally, the document highlights the objectives of MRP and its integration with financial and operational systems in the form of MRP-II.

1. CHETANA’S BACHELOR OF
MANAGEMENT STUDIES
SUBJECT: Production Management and Material Management
TOPIC: Inventory Management & Selective Control/ABC Analysis
Group no. 8
Under The Guidance Of:
Prof. Viju Navare

2. MEANING AND DEFINITION

3. FUNCTIONS OF INVENTORY
•SMOOTHING OUT IRREGULARITIES IN SUPPLY
•BUYING OR PRODUCING IN LOTS OR BATCHES
•TO MEET SEASONAL OR CYCLICAL DEMAND

4. •TO TAKE ADVANTAGE OF PRICE DISCOUNTS
WHILE BUYING ITEMS
•TO MAINTAIN CONTINUITY TO OPERATIONS
IN PRODUCTION PROCESS
FUNCTIONS OF INVENTORY

5. INVENTORY MANAGEMENT AND CONTROL
Because of high cost
involved in inventories,
their proper management
and control assume
considerable importance.
In fact, the management of
inventory is given such an
importance, that, it is often
treated synonymous with
materials management.

6. FACTORS INFLUENCING INVENTORY
MANAGEMENT AND CONTROL
•Type of Product
•Type of Manufacture
•Volume of Production

7. BENEFITS OF INVENTORY MANAGEMENT CONTROL

8. PROCESS OF INVENTORY MANAGEMENT
AND CONTROL
STEP 1. DETERMINATION OF OPTIMUM INVENTORY LEVELS
AND PROCEDURES OF THEIR REVIEW AND ADJUSTMENT
STEP 2. DETERMINATION OF THE DEGREE OF CONTROL THAT IS
REQUIRED FOR THE BEST RESULTS
STEP 3. PLANNING AND DESIGN OF THE INVENTORY CONTROL
SYSTEM
S TEP 4 . PLA N N I NG O F TH E IN V EN TO RY CO N TRO L
O RG A N I ZATI O N

9. SELECTIVE INVENTORY CONTROL

11. ADVANTAGE OF ABC ANALYSIS
LIMITATIONS OF ABC ANALYSIS

12. MINIMUM-MAXIMUM TECHNIQUE

13. TWO-BIN TECHNIQUE

14. V-E-D ANALYSIS

15. F-S-N ANALYSIS

16. H-M-LANALYSIS

17. MATERIAL REQUIREMENTS PLANNING (MRP-1)
Material Requirements
Planning is a computer based
information system designed
to handle ordering and
scheduling of dependent-
demand inventories.

18. OBJECTIVES OF MRP

19. MANUFACTURING RESOURCES PLANING OR MRP-II
When the capabilities of closed-loop MRP
are extended to integrate financial,
accounting, personnel, engineering and
marketing information along with the
production planning and control activities
of basic MRP system, the resulting broad-
based resource coordination system is
known as manufacturing resource
planning or MRPII.

20. MRP SYSTEM INPUTS
• MASTER PRODUCTION SCHEDULE (MPS)
• BILL OF MATERIAL FILE OR PRODUCT STRUCTURE FILE
• INVENTORY STATUS FILE

21. MRP SYSTEM OUTPUTS
• PRIMARY OUTPUTS
• SECONDARY OUTPUTS