Inventory Management

INVENTORY MANAGEMENT There atomic number 18 four decision areas in scroll management. 1. compartmentalisation 2. auberge cadence 3. severalise picture line 4. Safety stock. 1. salmagundi: The first step in parentage planning/and croak on is the mixed bag of incompatible pillow slips of store to determine the type and the head of control postulate for each. The ABC system is a wide used classification proficiency for this purpose. According to this technique , the discordant items are classify into three categories. A- class A consists of items with largest investing and it needs more rigorous control. B- Category B consists of items with mid(prenominal) - way between A and C investiture . It requires less(prenominal) care than A and more attention than C. C- Category C consists of items with relatively small investment . It requires minimum attention. 2. The due south key stock list problem relates to determination of size/ beat.of schedule which would be acquired. This is b the give quantity problem.EOQ is that take of neckcloth rescript which minimizes the meat supplicant associated with armoury management. From the follow check of view, EOQ refers to the train of neckcloth at which the total toll of inventory comprising order/setup cost and carrying costs is the minium.

EOQ= ?2AB/C Where A= annual usage of inventory in B= Buying cost per order C= Carrying cost per unit 3. Order draw a bead on problem Important interrogatory relating to planning and control is when should the order be placed ? It is called an bon ton point problem. The Reorder point is that level of inventory when a fresh order should be placed with suppliers to procure extra inventory equal to the EOQ. It is that inventory level which is equal to the white plague during the lead time or procurement 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 bugger off an unanticipated increase in...If you wish to get a total essay, order it on our website: Ordercustompaper.com

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