Advantages And Disadvantages Of An MRP System
Purchasing and supplies assignment
The relevant details
NAME
LEAH JERUTO REGISTRATION NUMBER
NATURE OF ASSIGNMENT
Individual work
DATE PRESENTED
21/03/ 2015
TASK
HANDLING INVENTORY MANAGEMENT TOOLS
LECTURER NAME
William mwangi
ABC analysis
In materials management, the ABC analysis (or Selective Inventory Control) is an inventory categorization technique. ABC analysis divides an inventory into three categories- "A items" with very tight control and accurate records, "B items" with less tightly controlled and good records, and "C items" with the simplest controls possible and minimal records.
The ABC analysis provides a mechanism for identifying items that will have a significant impact on overall inventory cost, while also providing a mechanism for identifying different categories of stock that will require different management and controls.
The ABC analysis suggests that inventories of an organization are not of equal value. Thus, the inventory is grouped into three categories (A, B, and C) in order of their estimated importance.
'A' items are very important for an organization. Because of the high value of these 'A' items, frequent value analysis is required. In addition to that, an organization needs to choose an appropriate order pattern (e.g. ‘Just- in- time’) to avoid excess capacity. 'B' items are important, but of course less important than 'A' items and more important than 'C' items. Therefore 'B' items are intergroup items. 'C' items are marginally important.
Advantages and Disadvantages of ABC Analysis Inventory
Activity Based Costing, or ABC, is a method of allocating overhead and direct expenses related to the most important activities of the company first. This process allows business owners and managers an opportunity to better define the areas of manufacturing or sales that generate the most profit for the
The relevant details
NAME
LEAH JERUTO REGISTRATION NUMBER
NATURE OF ASSIGNMENT
Individual work
DATE PRESENTED
21/03/ 2015
TASK
HANDLING INVENTORY MANAGEMENT TOOLS
LECTURER NAME
William mwangi
ABC analysis
In materials management, the ABC analysis (or Selective Inventory Control) is an inventory categorization technique. ABC analysis divides an inventory into three categories- "A items" with very tight control and accurate records, "B items" with less tightly controlled and good records, and "C items" with the simplest controls possible and minimal records.
The ABC analysis provides a mechanism for identifying items that will have a significant impact on overall inventory cost, while also providing a mechanism for identifying different categories of stock that will require different management and controls.
The ABC analysis suggests that inventories of an organization are not of equal value. Thus, the inventory is grouped into three categories (A, B, and C) in order of their estimated importance.
'A' items are very important for an organization. Because of the high value of these 'A' items, frequent value analysis is required. In addition to that, an organization needs to choose an appropriate order pattern (e.g. ‘Just- in- time’) to avoid excess capacity. 'B' items are important, but of course less important than 'A' items and more important than 'C' items. Therefore 'B' items are intergroup items. 'C' items are marginally important.
Advantages and Disadvantages of ABC Analysis Inventory
Activity Based Costing, or ABC, is a method of allocating overhead and direct expenses related to the most important activities of the company first. This process allows business owners and managers an opportunity to better define the areas of manufacturing or sales that generate the most profit for the
References: Harris, Ford W. (1990) [Reprint from 1913]. "How Many Parts to Make at Once". Operations Research (INFORMS) 38 (6): 947–950. doi:10.1287/opre.38.6.947. JSTOR 170962. Retrieved Nov 21, 2012. edit Hax, AC and Candea, D. (1984), Production and Operations Management, Prentice-Hall, Englewood Cliffs, NJ, p. 135 Grubbström, Robert W. (1995). "Modelling production opportunities — an historical overview". International Journal of Production Economics 41: 1–14. doi:10.1016/0925-5273(95)00109-3. Nahmias, Steven (2005). Production and operations analysis. McGraw Hill Higher Education. edit Altintas, N.; Erhun, F.; Tayur, S. (2008). "Quantity Discounts Under Demand Uncertainty". Management Science 54 (4): 777–792. doi:10.1287/mnsc.1070.0829. edit Andrew Caplin and John Leahy, "Economic