Wednesday, May 26, 2010

Inventory Control Techniques - ABC Analysis

Some Inventory Control Techniques are:
1. ABC Analysis: This analysis recommends that the management should focus on key issues of decision making to simplify the decision making process. It will help the management to put their energy and efforts towards the majority areas requiring utmost attention. As per this analysis, the total inventory list will be divided into three classes A, B and C: 






                                                                                                                                                                    
 The control of inventory is exercised as follows: 

                                                                                                                                                  

2. HML analysis: In this analysis, the classification of existing inventory is based on unit price of the items. They are classified as high price, medium price and low cost items.

3. VED analysis: In this analysis, the classification of existing inventory is based on criticality of the items. They are classified as vital, essential and desirable items. It is mainly used in spare parts inventory.

4. FSN analysis:
In this analysis, the classification of existing inventory is based consumption of the items. They are classified as fast moving, slow moving and non-moving items

5. SDE analysis: In this analysis, the classification of existing inventory is based on the items.

6. GOLF analysis:
In this analysis, the classification of existing inventory is based sources of the items. They are classified as Government supply, ordinarily available, local availability and foreign source of supply items.

7. SOS analysis: In this analysis, the classification of existing inventory is based nature of supply of items. They are classified as seasonal and off-seasonal items. 

Keywords: Techniques of Inventory Control, Inventory Control Techniques, 

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