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Unit 13: Inventory Control
4. Vendor development programmes and vendor rating Notes
5. Codification and classification of materials
6. Investment policy and import substitution
Storage Policy
7. Centralised and decentralized storing
8. Inventory control system
9. Use of techniques like ABC Analysis, VED Analysis and FSN Analysis, etc.
Usage Policy
10. Wastage, scrap, spoilings and defectives
11. Pricing of raw materials
12. Material handling
A systematized purchase procedure is to be followed by the manufacturer for purchasing raw
materials for his business. His aim should not be just to acquire the raw-material at a low price,
he has to consider so many other factors like quality of raw material, quantity, timing of
purchases, sources, etc. Hence, there are several purchase parameters. They are portrayed as
follows:
Figure 13.1: Purchase Parameters
Right Quantity Right Quality
- EOQ - Specification of
- Inventory Models Materials
- Bill of Materials
Right Place Right Prices
- Delivery of - Negotiations and
Goods Discussions
- Learning Curve
effect
Right Attitude
Towards proper
Management of
Inventories
Right Source Right Time
- Vendor - Cost of Carrying
Rating Inventory
- Cost of not carrying
Inventory
Right Material Right Contract Right Transportation
- Value - Legal aspects - Cost of Transportation
Analysis
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