Everything you need to know about the techniques and methods of inventory management. Inventory management and control refers to a system, which ensures the supply of required quantity and quality of inventory at the required time. At the same time, it prevents unnecessary investment in inventories. The aim of inventory management is, therefore, to neither hold too much nor too [...]
The most common method to find out how much to order is Economic Order Quantity (EOQ). The economic lot size of an order depends upon two types of costs: i. Inventory carrying costs and ii. Procurement or set up costs. EQO gives the order level where total costs i.e., inventory carrying and procurement costs are minimum. EOQ formula is based [...]
There are some selective inventory control methods to have an effective control on the inventory. The important methods are: 1. ABC Analysis (Always Better Control) 2. VED Analysis (Vital, Essential, Desirable) 3. FSN Analysis (Fast, Slow moving and Non-moving) 4. SDE Analysis (Scarce, Difficult, Easy) 5. HML Analysis (High, Medium, Low) 6. Just-In-Time (JIT) Inventory System. Method # 1. ABC [...]