Saada

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.

Kinds of Inventory Control

* ABC Control

ABC inventory control is a method of classifying and controlling inventory according to its level of importance. Typically, dollar usage serves as the criteria used to determine importance, but other criteria, such as sales volume, also gets used. ABC inventory control works on the old 80/20 rule--a small amount of items normally dominate the results in most situations.

* Aggregate Control

Another inventory control method involving groups is the aggregate control method. Using this method, a business classifies its inventories into separate groups, each receiving a different level of inventory control. For example, a bakeshop might use three different classifications ingredients such as flour, sugar and cream comprise one classification, work-in-process or partially finished items comprise the second classification and finished goods or items ready to sell make up the third classification. The way the bakeshop controls each class of inventory depends on the rules established for that class. For example, all ingredient inventories might use a minimum/maximum policy--whenever the inventory reaches a minimum level, the bakeshop orders more inventory to reach its maximum inventory level.

* Safety Stock

Some companies use a very basic method of inventory control called safety stock. Companies use safety stock because of the uncertainty of consumer demand, uncertainty of supplier performance or uncertainty of product availability. Safety stock represents an amount over and above the average use or demand of a product. For example, a bakeshop monthly flour...