Vous êtes sur la page 1sur 34

INVENTORY CONTROL

MANAGEMENT
INTRODUCTION TO INVENTORY
• Inventory can be classified as supplies, raw materials,
work-in-process and finished goods which are
essential to a businesses’ operations.
• Inventory management depends heavily on sales
because inventory is purchased earlier than sales can
be made and poor inventory levels leads to either
lost sales or excessive carrying costs.
• Any changes in the products’ demand should be
worked into the company’s purchasing and
manufacturing schedules thus coordination among
the sales, purchasing, production and finance
departments is important.
OBJECTIVE OF INVENTORY MANAGEMENT
• Ensure that the inventories needed to sustain operations are
available
• Hold the costs of purchasing and carrying inventories to the
lowest possible level Inventory costs are divided into three
categories:
• Carrying costs: are associated with inventory and include cost
of capital tied up, storage and handling costs, insurance,
depreciation, taxes, losses due to deterioration, obsolescence,
or theft. They rise in direct proportion to the average amount
of inventory held.
• Ordering costs: include the costs of placing and receiving
orders. Are considered to be fixed costs and decline as the
number of orders decrease.
• Low inventory costs: results in the loss of sales, customer
goodwill and disruption of production schedules
DEFINATION OF INVENTORY
• Inventory is the stock of any item or resource
used in an organization. An inventory system is
the set of policies and controls that monitor
levels of inventory and determine what levels
should be maintained, when stock should be
replenished, and how large orders should be.
PURPOSE OF INVENTORY
– To maintain independence of operations.
– To meet variation in product demand.
– To allow flexibility in production scheduling.
– To provide a safeguard for variation in raw
material delivery time.
– To take advantage of economic purchase order
size.
– Many other domain-specific reasons.
TYPES OF INVENTORY
• Raw Material – needed for production of
goods or services
• Work in process ( WIP ) – consists of item such
as components or assemblies needed for final
product in manufacturing
• Maintenance/repair/operating (MRO) supply
• Finish Goods Inventory – in manufacturing
plants, warehouse and retail outlets are the
item sold to the firm’s customers.
THE INVENTORY MANAGEMENT
SYSTEM
• Organize the inventory management
effectively using
a. ABC Analysis
b.Record Accuracy
ABC ANALYSIS
• ABC analysis is a type of analysis of material dividing in three groups called A-group items, B-
Group items and C-group items. For the purpose of exercising control over materials.
Manufacturing concerns find it useful to divide materials into three categories.
• "A" group items: 10% of total number of items carries 70% of value.
• "B" group items: 20% of total number of items account for only about 20% consumption
value
• "C" group items: 70% of total number of items account for only about 10% of consumption
value
ABC analysis also helps in reducing the clerical costs and results in better planning
and improved inventory turnover. ABC analysis has to be resorted to because equal
attention to A, B and C items will not be worthwhile and would be very expensive
RECORD ACCURACY
• Inventory accuracy is refers to how well the inventory records agree with physical
count
• Based on the inventory record, a company determines net requirements for an
item, releases orders based on material availability, and performs inventory
analysis.
• If the records are not accurate, there will be shortages of material, disrupted
schedules and late deliveries, lost sales, low productivity and excess inventory.
• Three pieces of information must be accurate namely part description / number,
quantity, and location.
• Accurate inventory records enable firms to operate an effective materials
management system, maintain satisfactory customer service, operate effectively
and efficiently, and analyze inventory
• Inaccurate inventory records will result in lost sales, shortages and disrupted
schedules, excess inventory, low productivity, poor delivery performance, and
excessive expediting.
• Poor inventory record accuracy can be caused by many things, but they all result
from poor record-keeping systems and poorly trained personnel
INVENTORY COST
Holding costs - associated with keeping stock over time
• storage costs (Costs of running out
• rent/depreciation
• labour
• overheads (e.g. heating, lighting, security)
• money tied up (loss of interest, opportunity cost)
• obsolescence costs (if left with stock at end of product
life)
• stock deterioration (lose money if product deteriorates
whilst held)
• theft/insurance
INVENTORY COST
Ordering costs - associated with ordering and
receiving an order
• clerical/labour costs of processing orders
• inspection and return of poor quality products
• transport costs
• handling costs
Setup (or production change) costs
• Costs for arranging specific equipment setups,
and so on
INVENTORY COST
INVENTORY MODELS FOR INDEPENDENT
DEMAND
– Economic Order Quantity (EOQ) models
– Fixed-time period models
– Quantity Discount Models
ECONOMIC ORDER QUANTITY
• EOQ applies only when demand for a product is
constant over the year and each new order is
delivered in full when inventory reaches zero
• There is a fixed cost for each order placed, regardless
of the number of units ordered
• There is also a cost for each unit held in storage,
sometimes expressed as a percentage of the
purchase cost of the item.
EOQ
Assume :
• The ordering cost is constant.
• The rate of demand is known, and spread evenly
throughout the year.
• The lead time is fixed.
• The purchase price of the item is constant i.e. no
discount is available
• The replenishment is made instantaneously, the
whole batch is delivered at once.
• Only one product is involved
• Economic Order Quantity, EOQ =

The optimal number of order per year, N = D/EOQ

The expected time between orders per year, T = Working day per year / N

D
The Reorder Point, ROP = X L
Working day per year
Example 1
• Example 1
• Manatee uses EOQ logic to determine the order quantity for its
various computer components and is planning its Avatar chip
orders. Forecasted annual demand is 10,000 units Avatar chips. The
setup costs associated with placing and receiving each Avatar chip
order is $9.25. It is estimated that the cost to carry an Avatar chip in
inventory for a year is $5.00. Manatee operates a 250 days working
year in 50 weeks and on average, delivery of an order takes 5
working days. Calculate:

a. Economic Order Quantity (EOQ)


b. The optimal number of order per year (N)
c. The expected time between orders per year (T)
d. The Reorder point ( ROP )
e. Annual Total inventory cost
Answer
• Answer: _____________________________________
a) EOQ =  [ 2 (Demand) (Order Cost) ] / (Carrying Cost)
_____________________
EOQ =  [ 2 (10,000) (9.25) ] / (5)
_____________
EOQ =  [ 185,000 ] / 5
_______
EOQ =  37,000 = 192.35 units.

b) N = D/EOQ
= 10,000/ 192.35
= 52 order peryear.
• T = Working day peryear / N
= 250 / 52
= 4.8 days per ear

D
• ROP = X L
Working day per year
= (10,000 / 250) X 5
= 200 units

DS QC
• TC = +
𝑄 2
• = (10,000 x 9.25) / 192.35 + ( 192.35 x 5 ) / 2
• = $ 961.77.
QUANTITY DISCOUNT MODELS
• A quantity discount is a price discount on an item if predetermined
numbers of units are ordered.
• The quantity discounts are price reductions designed to induce large
orders.
• If quantity discounts are offered, the buyer must weigh the potential
benefits of reduced purchase price and fewer orders against the increase
in carrying costs caused by higher average inventories.
• Hence, the buyer's goal in this case is to select the order quantity that will
minimize total costs, where total cost is the sum of carrying cost, ordering
cost, and purchase cost.
• The basic EOQ model can be used to determine the optimal order size
with quantity discounts; however, the application of the model is slightly
altered. The total inventory cost function must now include the purchase
price of the item being ordered:

QUALITY DISCOUNT MODEL CALCULATION
STEPS.
Quantity Discount Model Calculation Steps:
• Compute EOQ for each quantity discount price.
• Is computed EOQ in the discount range?
• If not, use lowest cost quantity in the discount
range.
• Compute Total Cost for EOQ or lowest cost
quantity in discount range.
• Select quantity with the lowest Total Cost,
including the cost of the items purchased.
MASTER SCHEDULING
• The master production schedule (MPS) is effectively the plan
that the company has developed for production, staffing,
inventory, etc.
• It has as input a variety of data, e.g. forecast demand,
production costs, inventory costs, etc and as output a
production plan detailing amounts to be produced, staffing
levels, etc for each of a number of time periods.
• This production plan is operates at an aggregate level (that is
it does not usually go into great detail about parts to be used,
etc - hence the name aggregate planning); and is cost driven,
that is it attempts to meet the specified requirements at
minimum cost.
DEFINATION MPS
• Master production schedule is translating a
business plan into a comprehensive product
manufacturing schedule that covers what is to
be assembled or made, when, with what
materials acquired when, and the cash
required. MPS is a key component of material
requirements planning (MRP).
• The MPS - the production quantity to meet
demand from all sources & is used for
computing the requirements of all time-
phased end items
FUNCTION OF MASTER PRODUCTION
SCHEDULING
• An effective MPS ultimately will:
– Give production, planning, purchasing, and
management the information to plan and control
manufacturing
– Ties overall business planning and forecasting to
detail operations
– Enable marketing to make legitimate delivery
commitments to warehouses and customers
– Increase the efficiency and accuracy of a
company's manufacturing
BENEFIT OF MPS
• Production plan with resource, schedule and available inventory (It all starts with
what do we want to make, when do we want to make, what does it take to make
it, What we have got)
– Increased master scheduler efficiency and effectiveness
– Increased customer service levels
– Reduced inventory
– Improved margins
– Increased visibility and operational control
– Process change-over reduction
– Translates a business plan with forecasted demand
– Inventory reduction, leveling
– Reduced production bottlenecks and idle equipment – Reduce manual and
inconsistent scheduling efforts at each production level
– Increase production efficiency- Increased resource utilization and lowered
manufacturing costs
– Labor load leveling
– Accurate delivery date quotes – Improved on-time delivery performance
– Real time information
APPLICATION OF MPS
• You can enter production planning or forecast by items in the
Master Production Schedule (MPS) at
Manufacturing/Planning/Master Production Schedule
• The objective of the Master Production Schedule (MPS) is to
plan and control materials and capacity of resources to meet
production demands
• The MPS defines the number of end items that need to be
produced within a certain period based on a forecast.
• The MPS is also used to calculate expected material
requirements to meet the production schedule.
Cont :-
Inputs To Mps
• Market requirements
• Production Plan from Aggregate Planning
• Resources available

Constraints
• Quantities of individual items must equal aggregate quantities from
the Production Plan
• Demand which must be met
– Capacity available

Output
• An MPS showing end items available every month (or period) that is
feasible with respect to demand and capacity. At this point we
know when we need units available so we can plan when to
produce or order using MRP.
MATERIAL REQUIREMENT PLANNING
• Computerized ordering and scheduling system for manufacturing and
fabrication industries, it uses bill of materials data, inventory data, and
master production schedule to project what material is required, when,
and in what quantity
• . MRP phases orders for dependent-demand items (such as raw materials,
components, parts) over a period to synchronize flow of materials and in
in-process inventories with production schedules
• It also computes and tracks effect of hundreds of variables such as new
orders, changes in various capacities, overloaded production centers,
shortages, and delays by suppliers, and feeds financial data into the
accounting system.
• In contrast to just in time inventory (a demand-pull production system),
• MRP is a plan-push system, and in contrast to advanced planning system
(a forward scheduling system) it is a backward-scheduling system.
OBJECTIVE OF MRP
• Ensure the availability of materials, components,
and products for planned production and for
customer delivery,
• Maintain the lowest possible level of inventory,
• Plan manufacturing activities, delivery schedules,
and purchasing activities.
• Reduction in Inventory Cost
• Meeting Delivery Schedule
• Improved Performance of production
MRP Structure
REQUIREMENT OF MRP
Material Requirements Planning (MRP) need
things below:
• Master Production Schedule (MPS)
• Bill of Material
• Information about the stock right
• Correct order information
• The lead time is estimated to be accurate.
MRP INPUT & OUTPUT
• Input
- Bill of Material
- Lead time
- Inventory Data
- Purchasing Data
• Output
- MRP by period report
- MRP by date report
- Planned order report
- Purchase Advice
- Exception report.

Vous aimerez peut-être aussi