PRESENTATION ON

INVENTORY CONTROL

BY DHIRENDER SINGH

B.TECH [ME]

DEFINATION :

“MATERIAL MANAGEMENT IS THE PLANNING ,DIRECTING ,CONTROLLING COORDINATION OF ALL THOSE ACTIVITIES CONCERNED WITH MATERIAL AND INVENTORY REQIREMENTS ,FROM THE POINT OF THEIR INCPECTION TO THEIR INTRODUCTION INTO MANUFACTURING PROCESS”

PURCHASING PROCEDURE

RECEIVING PURCHASE REQUISITIONS

EXPLORING THE SOURCES OF SUPPLY AND CHOOSING THE SUPPLIER

PLACING ORDER

FOLLOW UP

RECIEPT OF MATERIALS

INSPECTIONS OF MATERIALS

CHECKING

INVENTORY CONTROL DEFINITION: PROCESS OF DECIDING WHAT AND HOW

MUCH OF VARIOUS ITEMS ARE KEPT IN STOCK.

FUNCTIONS : DETERMINE ITEM TO BE STOCKED. KEEP SUITABLE RECORDS . WEED OUT OBSOLETE ITEMS . DETERMINE WHEN AND HOW MUCH TO

STOCK AND REPLENISH.

LEAD TIME BY LEAD TIME IS MEANT THE TIME

THAT LAPSES BETWEEN THE RAISING OF THE INDENT BY THE STORES AND THE RECEIPT OF

MATERIALS BY THEM

FIXATION OF STOCK LEVEL

MINIMUM INVENTORY LEVEL [RECORDING LEVEL] - [NORMAL

CONSUMPTION PER PERIOD * AVG DELIVERY PERIOD]

MAXIMUM INVENTORY LEVEL [RECORDING LEVEL + RECORDING LEVEL] AVERAGE INVENTORY LEVEL [MAX +MIN]/2 REORDER LEVEL [MAXIMUM CONSUMPTION DURING PERIOD]

* [MAX PERIOD REQUIRED FOR DELIVERY]

ECONOMIC ORDER QUANTITY

REPRESENTS THE QUANTITY OF AN ITEM WHICH IS MOST ECONOMICAL TO ORDER WHEN FRESH SUPPLY ARE REQUIRED.

IT AIMS TOTAL OF ORDERING AND INVENTORY CARRYING COST WILL BE MINIMUM.

CARRYING COST INVENTORIES CONSIST OF RENT OF STORAGE SPACE,COST OF INSURANCE AND MAINTAINANCE.

EOQ=SQ ROOT(2AS/PC0)WHERE

A=ANNUAL USAGE IN UNITS S=COST OF PLACING AN ORDERP=PRICE OF MATERIAL PER UNIT

C=COST OF STORAGE OF MATERIAL

PERPETUAL INVENTORY CONTROL

REQUIRES A STOCK RECORD OR REGISTER.

REQUISITIONS AND DISBURSEMENTS ARE RECORDED.

PROVIDES AN UPTO DATE RECORD OF INVENTORIES TO REDUCE MISAPPROPIATIONS.

MERITS OF (PIC) PREPETUAL INVENTORY

CONTROL NO NEED OF CLOSING BUSINESS FOR

STOCK CHECKING. CONTINUOS WATCH IS MAINTAINED. BALANCES AND ADJUST BLOCK STOCK

AND ACTUAL STOCK IMMEDIATELY. ELIMINATES,THE ELABORATED COSTLY

PERIODICAL STOCK CHECKING .

PERIODICAL STOCK CHECKING

REQUIRES AN OCCASIONAL COUNT OF STOCK TO DETERMINE INVENTORY BALANCE ON HAND.

THE WAGE OF STORES IS DETERMINE BY ADDING CURRENT RECEIPTS TO THE OLD BALANCE AND SUBTRACTINGH THE NEW BALANCE ON HAND.

INVENTORY MODELS FIXED ORDER QUANTITY

SYSTEM REPLENISHMENT SYSTEM. OPTIONAL OR MODIFIED

RPLENISHMENT SYSTEMS

INVENTORY CONTROL THROUGH ABC

ANALYSIS ITEMS ARE DIVIDED INTO 3 CATEGORIES. CATEGORY A (MAX COST , MINIMUM

CONTRIBUTION TO NUMBER OF ITEMS) CATEGORY C (MINIMUM COST AND

MAXIMUM CONTRIBUTION TO NUMBER OF ITEMS.)

CATEGORY B (IN BETWEEN A AND C)

JUST IN TIME INVENTORY SYSTEM. IN THIS SYSTEM PURCHASE OF MATERIAL

OR GOODS IN SUCH A WAY THAT DELIVERY OF PURCHASED ITEMS IS ASSUMED BEFORE THEIR USE OF DEMAND.

TOO MUCH CARRYING COST IS THERE. TRUST ON SUPPLIERS INCREASE. IT INCLUDES PURCHASE COSTS AND

STOCKOUT COST SO QUITE A REALISTIC APPROACH THAN EOQ MODEL.

INVENTORY CONTROL THROUGH ABC ANALYSIS

GROUP % OF ITEMS % OF COSTS

A 10% 70%

B 25% 20%

C 65% 10%

THANK U FOR PATIENCE LISTENING