INVENTORY/STORES MANAGEMENT TECHNIQUIES

 INVENTORY MANAGEMENT and its Techniques

      It is that part of materials management, where optimum level of raw materials, work in progress, finished goods, consumables, spares and supplies are maintained, so that, regular supply of materials is assured for continuous flow of production and other activities. 

 Techniques of inventory management 

1.Fixation of ECONOMIC ORDERING QUANTITY( EOQ) - 

It consists of 

* ordering cost, 

*inventory carrying cost and 

*Annual consumption of materials. 

2.Stock levels of Materials-

It consists of various stock levels like-

  *minimum stock level,

  *maximum stock level,

  *Reorder stock level,

  *Average stock level,

  *Danger stock level

3.Stock/ Inventory Turn over Ratio

 It indicates the rate of speed at which materials are consumed.

* It is calculated by dividing value of materials consumed with average value of materials kept.

4.Selective Inventory Control/(Analysis of Inventories)

It consists of 

*ABC Analysis (Always Better Control)

*VED Analysis (Vital Essential Desirable)

*FSN Analysis (Fast moving,Slow moving, Non moving)

*JIT SYSTEM (Just In Time inventory)

5.Store Records

 It consists of store documents like

*BIN CARD or Bin Tag or Stock Card

*Double Bin System

*Store Ledger

6.Inventory SYSTEM/ Stock Taking

It consist of verification and comparison of physical stock by various methods like

*Periodic and Annual inventory system 

*Perpetual inventory system 

*Continuous stock taking