Inventory Management

INVENTORY MANAGEMENT There are four ending areas in scroll management. 1. compartmentalisation 2. rewrite cadence 3. Order picture hassle 4. Safety stock. 1. Classification: The first grade in parentage planning/and operate on is the salmagundi of different types of store to determine the type and the head of view required for each. The ABC system is a wide utilise classification technique for this purpose. According to this technique , the discordant items are classified into three categories. A- class A consists of items with largest investing and it involve to a greater extent rigorous control. B- Category B consists of items with mid(prenominal) - way mingled with A and C investment . It requires less(prenominal) attention than A and more attention than C. C- Category C consists of items with relatively subtile investment . It requires minimum attention. 2. The due south key store problem relates to determination of size/ quantity.of ar moury which would be acquired. This is b the value quantity problem.EOQ is that take of inventory order which minimizes the join appeal associated with inventory management. From the cost point of view, EOQ refers to the train of inventory at which the total cost of inventory comprising order/frame-up cost and carrying costs is the minium.

EOQ= ?2AB/C Where A= one-year system of inventory in B= Buying cost per order C= Carrying cost per unit 3. Order point problem Important interrogatory relating to planning and control is when should the order be position ? It is called an club point problem. The Reorder point is that take of inventory when a fresh order should be placed with suppliers to procure supererog! atory inventory equal to the EOQ. It is that inventory level which is equal to the phthisis during the mastermind time or procurance time. Reorder level= ( Daily usage x lead time)+safety quantity/stock 4. Safety stocks: There are minimum additional inventory which serve as a safety margin to suffer an unanticipated increase in...If you compulsion to get a total essay, order it on our website: OrderEssay.net

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