This document discusses inventory management techniques presented by several individuals to Mrs. Sarika Ma'am. It defines inventory and describes different types including work in process, finished goods, and raw materials. It explains reasons to hold inventory and the objectives of inventory management, which include ensuring continuous supply and maintaining optimal inventory levels. The document also discusses various inventory classification techniques used to categorize inventory such as ABC analysis, HML analysis, and VED classification. It notes that effective inventory management involves accurately tracking production, shipments, and taxes to maintain control over inventory volumes and movement.

1. :
Inventory Management techniques
Presented By:
•Rohit Kamble # 5
•Philomen Prem # 10
•Sanjeev Kumar # 15
•Shrutee Rajendra Acharya# 21
•Ruchit Parmar# 27
•Vandana Dubey #37
•Khandu Chaudhari # 40
Presented to:
Mrs. Sarika Ma’am
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2. Inventory Definition
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3. 3

4. T y p e s o f
I n v e n t o r y :
Work in
process
Work in
process
Work in
process
Finished
goods
Raw
Materials
Vendors Customer
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5. Reasons To Hold Inventory:
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6. Objective of Inventory Management:
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7. An effective inventory management
should:
•Ensure a continuous supply of raw materials to facilitate
uninterrupted production.
•Maintain sufficient stocks of raw materials in periods of
short supply and anticipate price changes.
•Maintain sufficient finished goods inventory for smooth
sales operation, and efficient customer service.
•Minimize the carrying cost and time.
•Control investment in inventories and keep it at an optimum
level.
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8. An optimum inventory level involves three
types of costs:
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9. SDF
Classification of inventory:
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10. ABC Classification
The ABC analysis is a business
term used to define
an inventory categorization
technique often used
in materials management. It is
also known as Selective
Inventory Control. Policies
based on ABC analysis:
A ITEMS: very tight control and
accurate records.
B ITEMS: less tightly controlled
and good records.
C ITEMS: simplest controls
possible and minimal records.
X Y Z
A n a l y s i s :
On the basis of value of
inventory stored
Whereas ABC was on
the basis of value of
consumption to value.
X – High Value
Y – Medium value
Z – Least value
Aimed to identify items
which are extensively
stocked. 10

11. HML Classification:
T h e H M L a n a l y s i s
i s u s e f u l f o r
k e e p i n g c o n t r o l
o v e r c o n s u m p t i o n
a t d e p a r t m e n t a l
l e v e l s , f o r
d e c i d i n g t h e
f r e q u e n c y o f
p h y s i c a l
v e r i f i c a t i o n , a n d
f o r c o n t r o l l i n g
p u r c h a s e s .
Aimed to control the purchase of
raw materials.
H – High,
M- Medium,
L - Low
VED Classification:
•Mainly for spare parts
because their consumption
pattern is different from
raw materials.
•Raw materials on
market demand
•Spare parts on
performance of plant and
machinery.
•V – Vital,
•E – Essential,
•D – Desirable 11

12. FSN Classification:
According to the
consumption pattern.
To combat obsolete
items
F – Fast moving
S – Slow moving
N – Non Moving
SDF & GOLF Classification
B a s e d o n
s o u r c e o f
p r o c u r e me n t
S – S c a r c e ,
D - D i f f i c u l t ,
E - E a s y .
GOLF:
G – G o v e r n me n t ,
O – O r d i n a r y ,
L – L o c a l ,
F – F o r e i g n .
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13. SOS Classification:
Raw materials especially for agriculture
units:
S – Seasonal
OS – Off seasonal
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14. •I n v e n t o r y ma n a g e me n t h a s t o d o w i t h
k e e p i n g a c c u r a t e r e c o r d s o f f i n i s h e d
g o o d s t h a t a r e r e a d y f o r s h i p me n t .
•T h i s o f t e n me a n s p o s t i n g t h e p r o d u c t i o n
o f n e w l y c o mp l e t e d g o o d s t o t h e i n v e n t o r y
t o t a l s a s w e l l a s s u b t r a c t i n g t h e mo s t
r e c e n t s h i p me n t s o f f i n i s h e d g o o d s t o
b u y e r s .
•I n a d d i t i o n t o ma i n t a i n i n g c o n t r o l o f t h e
v o l u me a n d mo v e me n t o f v a r i o u s
i n v e n t o r i e s , i n v e n t o r y ma n a g e me n t a l s o
ma k e s i t p o s s i b l e t o p r e p a r e a c c u r a t e
r e c o r d s t h a t a r e u s e d f o r a c c e s s i n g a n y
t a x e s d u e o n e a c h i n v e n t o r y t y p e .
•Wi t h o u t p r e c i s e d a t a r e g a r d i n g u n i t
v o l u me s w i t h i n e a c h p h a s e o f t h e o v e r a l l
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15. THANK YOU
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