Material Cost Flashcards
5 categories in this chapter
- Different levels of inventory
- Find cost
- ABC Analysis
- Mobility
- LIFO, FIFO, Weighted average
Formulas recall sheet
Re-order level
Re- order period
Safety stock
Maximum stock level
Minimum stock level
Average stock level
Danger level
EOQ
Associated cost
No. Of orders per annum
Time gap between 2 purchases
Average consumption
Lead time consumption
Lead time
Total cost
Inventory Turnover ratio
Average no. Of days of inventory held
3Es
Economy
Efficiency
Effectiveness
Importance of proper recording
Quality of final product
Price of final product
Production continuity
Cost of stock holding & stock out
Wastage and other losses
Regular information about resources
Objectives of system of material control
Minimizing interruption in product process
Optimization of material cost
Reduction in wastages
Adequate information
Completion of order in time
Elements ov material control
Procurement control
Storage control
Usage control
Material control jnvolves efficient functioning of
Purchasing
Receiving
Inspection
Storage
Issuing
Maintenance of records
Stock audit
Duties of store keeper
General control over store
Safe custody of materials
Maintaining records
Initiate purchase requisition
Maintaining adequate stock level
Issue of materials
Stock rectification and reconciliation
Store records
Bin cards
Stock control cards
Store ledger
Inventory control - by setting quantitative levels
Re- order stock level - when to order
ROQ/EOQ - How much to order
Max stock level - upto how much stock
Min stock level - Atleast how much stock
Average stock level - stock normally kept
Danger stock level - kept for emergency requirement
Buffer stock - to meet sudden demand
Inventory control - on basis of relative classification
ABC analysis - on basis of value & frequency
Fast, slow & non moving- basis of inventory
Vital, essential & desirable- T.O importance of inventory
High, medium & low- price of an item of inventory
Advantages of ABC analysis
Continuity in production
Lower cost
Less attention required
Systematic working
Valuation of material issues
Cost price methods :
Specific price method
First- in- first- out method
Last- in- first- out method
average price methods :
Simple average price method
Weighted average price method
Market price methods :
Replacement price methods
Realizable price method
Notional price methods :
Standard price method
Inflated price method
Re- use price method
