12-10-2012, 05:43 PM
SELECTIVE INVENTORY CONTROL
SELECTIVE INVENTORY.pdf (Size: 16.12 KB / Downloads: 317)
· To identify items, which bring significant benefit by proper management from among
hundreds and thousands of items managed by an organisation
· Determine the importance of items and thus allows different levels of control based
on the relative importance of items
Stock-Keeping Unit (SKU)
· Management decisions regarding inventories must ultimately be made at the level of
an individual item or product
· The specific unit to be controlled will be called a stock-keeping unit
· An SKU will be defined as an item of stock that is completely specified as to
functions, style, size, colour, and usually location
Examples:
· The same style shoes in two different sizes would constitute two different SKUs
· Each combination of size and grade of steel rod in raw stock constitutes a separate
SKU
· An oil company must regard each segregation of crude as a separate SKU
· A tire manufacturer would normally treat the exactly same tire at two geographically
remote locations as two distinct SKUs
Different Controls used with different classes
· A Items: High priority – Tight control including complete accurate records, regular
and frequent review by management, frequent review of demand forecast and close
follow-up and expediting to reduce lead time
· B Items: Medium priority – Normal Control
· C Items: Lowest priority – Simplest possible control. Perhaps use a two-bin system or
periodic review system. Order larger quantities and carry sufficient safety stock