What are the Inventory control techniques used by Company?

There are some techniques which help the company to control the inventory management by reducing the losses and time of delivering the goods to customer of a company. Some of the techniques are:

1)      Just In Time: In this technique the stocks are ordered when it is demanded by customer or required to fulfil the market demand. It reduces the carrying cost.

2)      ABC Analysis: In this technique the stocks are classified into A items, B items and C items.

a)      A items: The stocks which are high in value but low in quantity and needed constant supervision is come under this category.

b)      B items: The stocks which are moderate in value it means not high or not low and also moderate in quantity and needed moderate supervision is come under this category.

c)      C items: The stocks which are low in value but high in quantity and needed very less supervision is come under this category.

3)      Bulk shipment: In this technique the goods are ordered in bulk and which reduces the ordering cost but increases the carrying cost of those goods.

4)      Drop shipping: It is an agreement in which the details of the stocks required by the customers are transfer to the manufacturer and then they directly delivered the goods to customers.

5)      XYZ analysis: In this technique the stocks are classified according to the demand of a stock in a market. The stocks are divided into three categories:

a)      X items: The stocks which sold out more frequently than other stocks in a year are come under this category.

b)      Y items: The stocks which are sold less than the X items in a year.

c)      Z items: Under this technique the stocks are sold less frequently in a year.

6)      VED Analysis: Under this technique the sticks or materials are divided into 3 categories:

a)      V (Vital) items: The stocks under this category are vital for production purpose. Without that stocks or materials the production is not possible.

b)      E (Essential)items: Under this category the materials are very essential without it company faces loss.

c)      D (Desirable) items: Under this category the materials are desirable for company but without it company doesn't face any losses.

7)      SDE Analysis: Under this technique the materials are also divided into 3 categories:

a)      S (Scare) items: In this category the materials are scare and they are very rare in a market.

b)      D (Difficult) items: The materials in this category are very difficult and not easily available in a market.

c)      E (Easy) items: The materials in this category are easily available in a market. It can easily available in local shop also.

8)      HML Analysis: Under this technique the stocks or materials are divided according to the price per unit. The stocks are divided into 3 categories:

a)      H (High) items: In this technique the materials whose unit price is high is come under this category.

b)      M (Medium) items: In this category the stocks per unit price is not high or not low.

c)      L (Low) items: In this category the materials per unit price is very low.

9)      SOS Analysis: Under this technique the stocks or materials are classified on the basis of seasonal and off seasonal stocks into 2 categories:

a)      Seasonal items: The demand of the stocks is for whole year but they are available in specific season only.

b)      Off Seasonal items: Those stocks which are available in whole year but there demand arises only in specific season.

10)  FSN Analysis: Under this technique the stocks are divided according to the consumption of the stocks by the customers. The stocks are divided in 3 categories i.e. fast moving items, slow moving items and non moving items.