Policies for B items: The object of carrying out ABC analysis is to develop policy guidelines for selective control. This policy can also be applied in various other aspects of materials management.
D — refers to Difficult items, which cannot be procured easily. V — stands for Vital items, without which production would come to halt. Policies for A items: Above mentioned 4 control techniques are commonly used.
Deliveries within a specified period of order must be adhered. It is difficult and very costly to give equal attention to all the items of inventory.
VED analysis is done to consider essentiality of stocking spares. N — refers to Non-moving items. A-B-C analysis is meant for relative inventory control in which maximum attention can be given to items which consume more money and a fair attention can be given to medium value items, while the attention for low value can be reduced to routine procedure only.
Thus according to this system of analysis basis is criticality of items, whereas in A-B-C analysis basis was consumption values. E — refers to Easily available items.
These are non-existing items for which the store-keeper keeps bin-cards showing nil balance. If all the store items of an undertaking are analysed in terms of annual consumption of each item in rupees, it will be found that nearly 10 per cent sometimes even less of the items are responsible for about 70 per cent of total annual consumption cost, about 20 per cent items will require about 25 per cent of total consumption cost and rest 70 per cent of the items require only 5 per cent of the total annual consumption cost.
In this analysis, S — refers to Scarce items, which are in short supply and their availability is scarce.
G — refers to Ghost items. ABC analysis enables the materials manager to exercise selective control when he is confronted with a large number of items.
However, following are some other methods which help the materials management to selectively control the large number of items and effectively to selectively control the large number of items and effectively channelize his energy to problem areas resulting in optimal use of his efforts.
Remaining items which do not cause any immediate loss in production fall under this category. Policies for C items: Repeat order for a given product is always for this quantity until this is revised. Thus those bolts are equally important as that of machine although one is in category A and another in category C.
This includes imported items. Lead or Procurement Time.
Analysis based on annual consumption value; Does not depend on the importance of the item and limits for ABC categorisation are not uniform but will depend upon the size of the undertaking.
E — is for Essential items, without which dislocation of production work occurs.
Further it is also clarified that it do not indicate importance of any item or category, and every item is equally important. D — is for Desirable items. It is the quantity to be purchased at any time. ABC analysis is helpful to rationale the number of orders and thus reduces the overall inventory cost.
Generally 3 to 6 orders per year are placed for B items. These items are consumed from time to time. Thus we see that control policies for A, Band C items are based on two principles, namely:Purpose of an Inventory Control System The inventory control system is the mechanism within a company that is used for efficient management of the movement and storage of raw material, work in process, finished goods, effective utilization of people and equipment, and the communication of this information within the organization and its.
Essay # 1. Meaning and Need for Inventory Control: It may be defined “as the systematic location storage and recording of goods in such a way that desired degree of service can be made to the operating shops at minimum ultimate cost”.
The Need of Inventory Control. Abstract: Previously organizations had problems with inaccurate inventory control system. This research aims to investigate RFID techniques to solve inventory control problems. The Securitization of literature review related to importance of RFID in inventory control, highlights basic principle of RFID technology and emphasis on improvement of inventory control.
The current inventory control system is inefficient, unproductive and ineffective. Three individuals (the stockroom foreman, the purchasing manager and the manufacturing manager) are charged with ensuring that orders are place for replenishment "whenever one of them notices that the inventory is low".
Both systems offer the basic concepts of inventory management systems that is, invoicing, sales orders which is fulfilled by business, purchasing which would be the inbound inventory, barcode scanning whereby the inventory object is automatically identified before it is processed.
[tags: Business Inventory Systems] Good Essays words | (3 pages) | Preview. JIT Manufacturing and Inventory Control System - JIT Manufacturing and Inventory Control System Since the dawn of human existence evolution in all sectors of society has occurred due to Economic factors.
This has mainly happened due to the fact that all.Download