OM 2. 4inventorycontro

7/28/2019 OM 2. 4inventorycontro

1/26

4/12/2013XIDAS, INVENTORY CONTROL 1

-

Inventory Control

Topic


2/26


All the materials , parts, suppliers, expenses and in

process or finished products recorded on the books

by an organization and kept in its stocks,

warehouses or plant for some period of time.


3/26


Inventory control is the technique of maintaining

the size of the inventory at some desired level

keeping in view the best economic interest of anorganization.


4/26

Type of Inventory Reason for holding the Inventory

(1) Raw materials

To reap the price advantage

available on seasonal raw

materials.

(2) Work in progress To balance the production flow.

(3) Ready made components When the components are bought rather

than made.(4) Scraps They are disposal of in bulk.

(5) Finished Goods Lying in stock rooms and waiting

dispatches

4/12/2013 XIDAS, INVENTORY CONTROL 4


5/26


Protection against fluctuations in demand;

Better use of men, machines and material;

Protection against fluctuations in output;Control of stock volume;

Control of stock distribution.


6/26


Planning the inventories;Procurement of inventories;Receiving and inspection of inventories;

Storing and issuing the inventories;Recording the receipt and issues of

inventories.Physical verification of inventories;

Follow-up function ;Material standardization and substitution.


7/26

Executive decide two basic issues while dealing with inventories;

(a) How much of an item to order when the inventory of that item is to be

replenished.

(b) When to replenish the inventory of that item.

By definition, inventory facilitate production or satisfy customer

demands.

Inventory system is a set of policies and controls which monitors anddetermines the levels of inventory. Inventory conventionally include raw

materials, work-in-progress, components parts, supplies and finished goods.

Operations is a transformation process in which the inputs are raw materials

and output is the finished goods.

Suppliers Raw materials Finished good customers.


Production

Work-in-progress


8/264/12/2013XIDAS, INVENTORY CONTROL 8

Inventory levelSupply

rateDemand

rate



Deciding the maximum- minimum limits of

inventory;

Determination of Reorder point;

Determination of reorder quantity; Perpetual inventory control;

ABC analysis;

Method of control through turn over.



Quantity of inventory above which should not be

allowed to be kept. This quantity is fixed keeping in

view the disadvantages of overstocking;

Factors to be considered:Amount of capital available.

Godown space available.

Possibility of loss.



Cost of maintaining stores;

Likely fluctuation in prices;

Seasonal nature of supply of material;

Restriction imposed by Govt.; Possibility of change in fashion and habit.



This represents the quantity below which stocks

should not be allowed to fall .

The level is fixed for all items of stores and the

following factors are taken into account:1.Lead time-

2. Rate of consumption of the material during the

lead time.



It is the point at which if stock of the material in

store approaches, the store keeper should initiate

the purchase requisition for fresh supply of

material.

This level is fixed some where between maximum

and minimum level.



It is also known as standard order quantity ,

optimum quantity or economic lot size.

By definition economic order quantity that size of

order for which the total cost is minimum.



The widely used formula is

EOQ =2do/c

Where ,d=annual demand

O=order cost

C=carrying cost



It is efficient control of stores requires greater in

case of costlier items.



Item Quality Quantity order Checking

A Costlier Less Regular system to see

that there is no

overstocking as well as

that there is no dangerof production being

interrupted for

unwanted material.

B Less costlier Order may be on

review basis.

Position being viewed

in each monthC Economical Larger Order in large quantity

so that cost can be

avoided



It is a method of recording stores balances after

every receipt and issue, to facilitate regular

checking and obviate closing down for stock taking.

-Wheldon



Stores ledger, stores control, cards or bin cards are

properly maintained ;

Quantity balance store shown in the store ledger;

stock control and bin cards are reconciled; Exploring the cause of discrepancies if any physical

balances and book balances.


20/26

Daily Inventory Balance Record Product

Month Year

1 2 3 4 5 6 7

Opening Phys ical

Inventory

Deliveries Meter Sales Inventory Should Be Physical Inventory Variat ion Today Variat ion This

Month

12

3

4

5

6

7

8

9

10

11

12

1314

15

16

17

18

19

20

21

22

23

24

25

26

27

28

29

30

31

TOTALS

Day

Balance sheet is were information is

calculated to determine losses and

gains from daily sales. This is a

very important part of fuel

management it will give you

important records of sales (this isinventory control).


21/26

Daily Readings Product

Month Year

Readings Sales Readings Sales Readings Sales Readings SalesDip

cm.

Inventroy

litres

Water Dip

cm.

Dip

cm.

Inventroy

litres

Water Dip

cm.

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

2425

26

27

28

29

30

31

Total

Physical

InventoryDay

Total

Meter

Sales

Tank 1 Tank 2Pump 1 Pump 2 Pump 3 Pump 4

This is were information collected from

meter totals and tank dips are added and

recorded.


22/26

Month

Total

Sales

Variation

for Month% Loss

Total

Sales

Variation

for Month% Loss

Total

Sales

Variation

for Month% Loss

Monthly Summary

Product Product

Storage Capacity

Product

Storage CapacityStorage Capacity

This is were we record our calculated losses and gains for every

individual month. This sheet is used for the years sales report.Will give you sales of individual months. Record keeping is a

important method of tracking your inventory.


23/26

It means how many times a companys

inventory is sold and replaced (finished

product)



24/26

Inventory ratio (Raw material)-

The value of material consumed during a

period


Average value of inventory during that period

High ratio = fast moving stock


25/26

YOUR CRITICAL ANALYSIS



26/26

Thank you

OM 2. 4inventorycontro

Documents

Transcript of OM 2. 4inventorycontro