discuss with examples the two methods of inventory control. Which method do you think is better for a retail store with several items of small value?
Sol:
Two methods under consideration for retail are:
1.ABC analysis method and
2.Just in time Purchase
1.ABC analysis Method:
A- High Prority
B-Lessor Prority
C- Last prority
2. Just in time Purchase:It is a Purchasing system in which material Purchases are contracted so that the receipt and usage of the material to the maximum possible extent, Coincide.
With this we can eliminate inventory holding cost.
On Comparison of above two mentioned two methods
- in case retail business the most preforable method is ABC analysis method since there large volume of products.
-Further value of products is low Just in time purchase may not be suitable
-However both the methods can be combined to optimum benifit as below:
For Products with category A and B entity can keep the stock as required minimum level and for Category they can go Just in time purchase.
discuss with examples the two methods of inventory control. Which method do you think is better...
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