inventory management & selective control/abc analysis

CHETANA’S BACHELOR OF MANAGEMENT STUDIES

SUBJECT: Production Management and Material Management

TOPIC: Inventory Management & Selective Control/ABC Analysis

Group no. 8

Under The Guidance Of:Prof. Viju Navare

MEANING AND DEFINITION

FUNCTIONS OF INVENTORY

•SMOOTHING OUT IRREGULARITIES IN SUPPLY

•BUYING OR PRODUCING IN LOTS OR BATCHES

•TO MEET SEASONAL OR CYCLICAL DEMAND

•TO TAKE ADVANTAGE OF PRICE DISCOUNTS WHILE BUYING ITEMS

•TO MAINTAIN CONTINUITY TO OPERATIONS IN PRODUCTION PROCESS

FUNCTIONS OF INVENTORY

INVENTORY MANAGEMENT AND CONTROL

Because of high cost involved in inventories, their proper management and control assume considerable importance. In fact, the management of inventory is given such an importance, that, it is often treated synonymous with materials management.

FACTORS INFLUENCING INVENTORY MANAGEMENT AND CONTROL

•Type of Product

•Type of Manufacture

•Volume of Production

BENEFITS OF INVENTORY MANAGEMENT CONTROL

PROCESS OF INVENTORY MANAGEMENT AND CONTROL

STEP 1. DETERMINATION OF OPTIMUM INVENTORY LEVELS AND PROCEDURES OF THEIR REVIEW AND ADJUSTMENT

STEP 2. DETERMINATION OF THE DEGREE OF CONTROL THAT IS REQUIRED FOR THE BEST RESULTS

STEP 3. PLANNING AND DESIGN OF THE INVENTORY CONTROL SYSTEM

S T E P 4 . P L A N N I N G O F T H E I N V E N T O RY C O N T R O L O R G A N I Z AT I O N

SELECTIVE INVENTORY CONTROL

ADVANTAGE OF ABC ANALYSIS

LIMITATIONS OF ABC ANALYSIS

MINIMUM-MAXIMUM TECHNIQUE

TWO-BIN TECHNIQUE

V-E-D ANALYSIS

F-S-N ANALYSIS

H-M-L ANALYSIS

MATERIAL REQUIREMENTS PLANNING (MRP-1)

Material Requirements Planning is a computer based information system designed to handle ordering and scheduling of dependent-demand inventories.

OBJECTIVES OF MRP

MANUFACTURING RESOURCES PLANING OR MRP-II

When the capabilities of closed-loop MRP are extended to integrate financial, accounting, personnel, engineering and marketing information along with the production planning and control activities of basic MRP system, the resulting broad-based resource coordination system is known as manufacturing resource planning or MRPII.

MRP SYSTEM INPUTS

• MASTER PRODUCTION SCHEDULE (MPS)

• BILL OF MATERIAL FILE OR PRODUCT STRUCTURE FILE

• INVENTORY STATUS FILE

MRP SYSTEM OUTPUTS

• PRIMARY OUTPUTS

• SECONDARY OUTPUTS

THANK YOU