Physical inventory

11-5.2 Material IdentificationUse of industrial symbols saves clerical and speaking time -aid in sorting and segregating items under various classifications or group headingsNumericMnemonic

material storage systemsSymbol -permanent bin section assigning -apt to waste space

Index -permits material to be stored in any bin -requires a record of the material location -allows most effective use of storage space but quite tedious

Others-use of paints, tags, distinctive marks

Physical inventoryMaterial flowPhysical inventoryAn actual physical count of materials on hand is taken periodically so that adjustments may be made to correct cumulative errors in receipts and disbursements, incorrect postings or extensions, and possible omissions.

Count on large items manually or by weightCount on small items weigh-counted on scales

3 methods of taking physical inventoryInventory at a stated time annually covering all items at that time

Periodic physical inventories of all items during the course of the year so that each item is inventoried at least once during the year

Inventory of each item whenever the stock on that item reaches its lowest point

A form of physical control of inventoriesThe minimum or stand-by quantity is bonded in stock by tying together the required number of units, binding them with scotch tape, etc..

When the bond on such material must be broken to meet requirements, it becomes a signal to the stores clerk that stocks should be replenished by sending through new order

Customary methods of pricing inventories for accounting purposes:First-in-first-out (fifo)Last-in-first-out (lifo)Standard cost

~important to good inventory management

Since not all items in the inventory deserve the same amount of careABC analysisIs a routine by which different classes of items can be evaluatedThe procedure is to categorize all items into three classes A, B, and C, according to individual ratings11-6.1 Storeroom Location and Lay-outIn general, material storerooms are located close to the point of use.

Raw materials stored near first operationFinished goods shipping areaBanks of in-process materials immediately ahead of the next operationSupplies and tools central to the personnel and equipment served

Good lay-out practice = best flow of materialsDefinite limitations:SizeWeightValue of materialPerishableflammable

Decentralized material storageAll materials are delivered directly to the point if usefactory in a stockroom-no material moved twicetravelling stockrooms-employs merry-go-round conveyors

~ a well-laid-out stockroom provides space for the receipt and inspection of incoming materials and for making disbursements as well

Main aisle Should not be used as receiving areas. Which makes for a dangerous and inefficient conditionShould usually be between 4 and 8 feet wide

Sub-aisleBetween racks and binsMinimum of 30 inches wide

If portable or salable items are to be storedEntire store should be enclosed with wire-mesh partitioning or with solid-frame structureInformation / Service WindowAs part of an enclosure, material requisition and where small items can pass

In-House SupermarketsStockroom operates as supermarket by displaying items on shelves with the prices markedThis system eliminates filling out requisitions and associated processing, reduces delivery time, lowers departmental hoarding of excess items, and controls the dollar usage of supplies Charge Plate DepartmentItems requiring repair to fix the item are billed on a job order to the plate addressDepartmentsConsidered to be customers of an independent supermarket facility

11-6.2 Storage FacilitiesAllow for easy, quick, and sure receipt, storage and disbursement of materialProvide space and storage equipment adequate as both size and load-bearing capacity for the material to be storedProtect against damage and deteriorationProvide means for identifying and readily locating contentsProvide for the selection of the oldest material first

11-6.3 Storeroom OperationMajor PremiseFixation of responsibility for the major operationControl in the hands of one individual (the only one allowed)

Use of Perpetual-inventory recordsThe heart of the quantitative control of materials

Mechanized material handlingMaterial flowMaterial handingInternal transportation includes-pick-up and delivery schedules for production material-processing of work tickets (progress recording)-handling of supplies-training of truck drivers for safe and efficient operations-scheduling of maintenance and servicingactivities

Development of machines~Production people realize that material-handlingequipment is not merely a substitute for a personbut is a vital element in the continuous flow of goods through a plant

11-7.1 Types of Material-handling Equipment Floor type Material handlingHand TrucksTruck tractorsPower Lift TrucksStackersGravity-roll conveyorsPower conveyors

12

3

4

5

6Overhead typeChain conveyorsCranesTram-rail monorail hoist

12311-7.2 Selecting the EquipmentSame equipment-replacement policyCriteria includesDirect costs ex. rentsIndirect costs - ex. taxesIntangible factors - ex. better working conditions