Shinning stars-Inventory control-76 Manpreet kaur ghuman(b);141manvi khanna(c);

INTRODUCTION:->>

Inventory is the first and most important element of cost. The term inventory simply means any commodity. Inventory may be classified as follow :

*Raw material
*Components
*Tools
*Spare parts
*Consumable store
Inventory control is the supervision of supply, storage and accessibility of items in order to ensure an adequate supply without excessive oversupply.
It can also be referred as internal control - an accounting procedure or system designed to promote efficiency or assure the implementation of a policy or safeguard assets or avoid fraud and error etc.
Manpreet kaur-76(b)

Discussion:->>

1.) Economic Order Quantity – EOQ
An inventory-related equation that determines the optimum order quantity that a company should hold in its inventory given a set cost of production, demand rate and other variables. This is done to minimize variable inventory costs. The full equation is as follows:

2.)Definition of Just in Time Manufacturing:
Just In Time (JIT) is a production and inventory control system in which materials are purchased and units are produced only as needed to meet actual customer demand.

3.)ABC Analysis:-> Any stock is segregated into different sections. These items are classified into 3 sections, A, B and C.The ABC analysis is a simple and probably the most effective of all stock control methods. There are many other methods such as FIFO and LIFO

4.)VED ANALYSIS:->
VED Analysis can be defined as the analysis of maintenance spares in to
V Items – Items of vital importance,
E Items – Items of essential importance,
D Items – Items of desirable importance.

5.)Perpetual inventory system:-> may be defined as a method of recording stores balances after every receipt and issue to facilitate regular checking and to obviate closing down for stock taking
6.)Two bin system:->
Inventory control method in which when the first bin is used up, an order is made out for replenishment. The second bin contains enough quantity of the item to last until the ordered quantity arrives.
7.)Input-output ratio:-:This ratio is used to judge the efficiency in the usage of material.the ratio indicates the relation between the units of material put in for production and the units of finished product.
8.)Inventory Turnover Formula or Stock Turnover Ratio:-

Description: The inventory turnover formula or stock turnover ratio is the number of times that inventory is used during a measurement period.Formula The formula is as follows:
= Cost of Goods Sold Inventory
Manvi khanna-141( c)
CONCLUSION:->>

I conclude that If your goal is to make your business more profitable, you must increase efficiency and reduce costs.
Careful classification of your inventory, and continuing analysis of those classifications, can play a vital role in maintaining cost at the efficient levels you have established as your goals.

Inventory control is a constant requirement of doing business successfully. Procedures for pulling, receiving, and replenishing stock should be established, with considerations made for your particular environment. These procedures should be enforced as law at your company: inventory.


Manpreet kaur -76(b)