SCM

Inventory Control Group Members- Jagdeep pabba Tarun reddy Hemanth Topic

*

Inventory means

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.

**Definition of inventory control Inventory control is the technique of maintaining the size of the inventory at some desired level keeping in view the best economic interest of an organization.

**

Type of InventoryReason 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 componentsWhen the components are bought rather than made.(4) Scraps They are disposal of in bulk.

(5) Finished GoodsLying in stock rooms and waiting dispatches

**Objectives of inventory control 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.

*XIDAS, INVENTORY CONTROL*Major activities of inventory controlPlanning 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.

XIDAS, INVENTORY CONTROL

Inventory Decisions 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 and determines 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.*XIDAS, INVENTORY CONTROL*Production Work-in-progress


*XIDAS, INVENTORY CONTROL*Inventory levelSupply rateDemand rate


**Steps in Inventory control 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.

**Maximum stock level 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.

**Continue.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.

**Minimum stock levelThis 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.

**Re-ordering levelIt 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.

**Economic Order QuantityIt 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.

**Computation of EOQThe widely used formula is

EOQ ={2RCp/Ch}Where ,R= Annual quantity to be used in units.Cp=Cost of placing an Order.Ch= cost of holding one unit for one year.

**ABC Analysis

It is efficient control of stores requires greater in case of costlier items.

**Continued.

Item Quality Quantity orderChecking ACostlierLessRegular system to see that there is no overstocking as well as that there is no danger of production being interrupted for unwanted material. BLess costlier Order may be on review basis. Position being viewed in each monthCEconomical Larger Order in large quantity so that cost can be avoided

**Perpetual Inventory System

**Factors which help helpful to make system successfulStores 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.

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 is inventory control).

Daily Readings

Daily ReadingsProduct

MonthYear

DayPump 1Pump 2Pump 3Pump 4Total Meter SalesTank 1Tank 2Total Physical Inventory

ReadingsSalesReadingsSalesReadingsSalesReadingsSalesDip cm.Inventroy litresWater Dip cm.Dip cm.Inventroy litresWater 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

24

25

26

27

28

29

30

31

Inventory Balance

Daily Inventory Balance RecordProduct

MonthYear

Day1234567

Opening Physical InventoryDeliveriesMeter SalesInventory Should BePhysical InventoryVariation TodayVariation This Month

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

29

30

31

TOTALS

Monthly Summary

Monthly Summary

ProductProductProduct

Storage CapacityStorage CapacityStorage Capacity

MonthTotal SalesVariation for Month% LossTotal SalesVariation for Month% LossTotal SalesVariation for Month% Loss

NOTE: % Loss is a result of the following:

Formula:Variation this Month X 100%= % LOSS

Total Sales this Month, or capacity of tank(s), whichever is greater

This is were information collected from meter totals and tank dips are added and recorded.

Daily Readings


MonthYear



1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

29

30

31

Inventory Balance


MonthYear

Day1234567


1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

29

30

31

TOTALS

Monthly Summary

Monthly Summary







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.

Daily Readings


MonthYear



1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

29

30

31

Inventory Balance


MonthYear

Day1234567


1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

29

30

31

TOTALS

Monthly Summary

Monthly Summary







Inventory Turnover method

It means how many times a companys inventory is sold and replaced (finished product)**

Continued ..Inventory ratio (Raw material)-The value of material consumed during a period *XIDAS, INVENTORY CONTROL*Average value of inventory during that period High ratio = fast moving stock


**

Thank you

Documents

SCM