There are numerous techniques of Inventory Control. A few of them are: 1. Setting Stock Level: The purpose behind setting of different stock levels is to ensure smooth operation of the enterprise. 2. ABC Analysis: A.B.C. (Always Better Control) method  is dividing inventory into three categories: A, B, and C, based on annual consumption unit, inventory value, and cost significance. 3.Inventory Turnover Ratios: The ratio indicates how quickly the inventory is used for production. Higher the ratio, shorter will be the duration of inventory at the factory. 4.Economic Order Quantity : The most economic buying quantity or the optimum quantity is determined . Factors determining E.O.Q : a) Ordering Cost per order b) Carrying Cost per unit p.a. c) Annual Consumption

1. TECHNIQUES
OF
INVENTORY
CONTROL

2. Techniques
of
Inventory
Control
ABC
Analysis
E.O.Q.
(Economic
Order
Quantity)
Setting Stock
Level
Inventory
Turnover
Ratios

3. Setting Stock Level
The purpose behind
setting of different stock
levels is to ensure smooth
operation of the
enterprise.
ABC Analysis
A.B.C. (Always Better
Control) method is dividing
inventory into three
categories: A, B, and C,
based on annual
consumption unit, inventory
value, and cost significance.
Inventory Turnover Ratios
The ratio indicates how
quickly the inventory is
used for production. Higher
the ratio, shorter will be the
duration of inventory at the
factory.
Economic Order Quantity
The most economic buying
quantity or the optimum
quantity is
determined .

4. E.O.Q.
Re order Quantity: The stock
reaches the re-order level
Economic Order Quantity: The
cheapest/minimum stock level to
order at a time

5. Annual Consumption
2.Ordering
Cost
3.Carrying
Cost
1. Annual
ConsumptionIncludes Costs
of:
1. Placing an
Order
2. Transportation
3. Receiving
4. Inspection
Includes Costs
of:
1. Storage Space
2. Insurance
3. Obsolescence
4. Store Staff
5. Handling the
Material

6.  Minimizes Storage Level
 Minimizes Cost
 Demand Is Already Known