Production.

Planning and ProductionScheduling

Control 4.5

since they are combined with 0nwhich equipment should it be done and by whom?
commonly used
charts are not What is the sequence in which jobs/operations needed to be
scheduledcharts. handled?
PRODUCTION SCHEDULING
The various functions of an effective production scheduling
SCHEDULING system include:
INTRODUCTIONTO ) Allocating jobs to facilities.
4.3. scheduling is the final stage in
indicated in Fig.1.2 of unit I, (i) Establishing a set of rules of priorities to sequence the
/ As the stage at which all the producion
production planning. It is projected on a time scale. activities on the facilities.
activities are coordinated and wha
schedule is like a time table hat tells us (i) Dispatching job orders as per the schedule to initiate loading
A production what and when. ofjobs to facilities.
be doing
machine or departmentshould machine loading and (iv) Reviewing the status of jobs as they are loaded and processed
pointed out in Section 3.15 of unit II,
V As
procedure with which we try to match te in the facilities, i.e., follow-up work.
scheduling is a
(quantities, due dats
order () Expediting the critical jobs.
requirements set out in the production facilities.
delivery) with the available
i.e., dates of
4.3.2. Objectives of Production Scheduling
the metio
should be formulated for withte The objectives of production scheduling are:
V The production schedule requirements
which satisfactorily match the systems ) to meet the due dates,
available resources. (i) to minimise lead time,
4.3.1. What is Scheduling? (i) to minimize setup time or cost,
start datessothatjo
YScheduling refers to the setting of operation. iv) to
productit
minimize work-in-process inventory, and
will be completed by their due date.
of
(V) to maximize machine or labour utilisation.
the timing M
VIn a broader sense, scheduling establishes
equipment
resourcas
4.33, Data Requirements for Scheduling
activities that use the firm's human and The
serve its customers.
specific
Work-cente
production
() the
scheduling requires accurate information on:
V Scheduling is used to allocate work loads to current status of jobs (e.g., what orders are in process and
and to determine the sequence in which
operations where);
() what
(i) the upcoming jobs are
performed within the available capacity. available;
V In simple terms, scheduling deals with: adequacy of materials and capacities,
I Which work centre will do
which job?
startedand
when equipment
() JOb and labour utilisation, and
job progress and
When should an
end?
operation/job to be efficiency.
 ProductionScheduling
Production Planning and 4.7
4.6 Control
must contain information Aggregate Plan
addition, the system database
In lead times, work-center
current inventory levels,lot sizes,
scrap rates, due
dates, etc. capacities, Month
Number ofmotors
Jan

40
Feb
25
Mar Apr May Jun
55 30 30
Jul Aug| Sep
run times, 50 30 60 40
set-up and TOOLS/TECHNIQUES
OF SCHEDULING Master Schedule
44. TYPES
(FORMS OF SCHEDULE)
Jan Feb Mar Apr May Jun
Schedulina) Month Jul Aug Sep
4.4.1, Master Scheduling (Master Production AC motors:
5 hp 15 30 30 10
[Link]. What is it? 25 hp 20 25 25 15 15 15 20 30 20
as master production schedu
The naster schedule, also known DC motors:
plan and translates it inlb
(MPS), formalizes the production short to immediate plaming 20 hp 10 10
WR motors:
specific end-item requirements over a 10 hp 5 15 15 5 20 10
horizon.
material and capacity Fig. 4.3. Aggregate plan and master schedule (for electric-motors)
Then the end items are exploded into specific
planning (MRP) and
requirements by the material requirement 44.1.3. Inputs to MPS
capacity requirements planning (CRP) systems. The major inputs to the master production schedule are:
the entire production ad
V Then the MPS essentially drives () Forecasts of demand of end items,
inventory system. (ii) Customer orders, and
[Link]. Master Scheduling Vs Aggregate Planning and (ii) Inventory on-hand from the previous period.
the quantity
Aggregate planning is the process of planning by 44.1.4. Determining the Planning Horizon Length of a Master
18 months)other
timing of output over the medium range (often 3 to and Schedule
adjusting the production rate, employment, inventory, The planning horizon length (time span) of a master schedule
controllable variables.
expressesthe depends on the type of product, volume of production and
Master scheduling follows aggregate planning and anddates# Component lead times of the product being produced.
overall plan in terms of specific end items to produce andordes The time horizon be weeks, months, or some combination,
but
the schedule shouldcanencompass the lead times for all purchasedand
produce them. It uses information from both forecasts activities.
on hand, and it is the major driver of all production scheduk
assembled components.
Fig.4.3 illustrates a simplified aggregate plan and
master [Link]. Functions of MPS
for electric motors. The main
) To functions
of MPS are:
aggregate plans into specific end items.
(i) To translate
(ii) evaluate alternative schedules.
To generate material requirements.
 Production. Planning and ProductionScheduling
4.8
capacityrequirements.
Control Fig.4.5 describes the flow chart for master
4.9

(iv) To generate
information processing.
production scheduling.
() To facilitate Forecasts and
valid priorities. Customer orders
(v) To maintain
capacity effectively.
(vii) To utilize Domestic and
Aggregate plan
End products and
Scheduling Process International service parts
[Link]. Master Production MPS)
(or spare parts)
(Procedure for Developing Tentative
developing MPS. master production
Fig.4.4 illustrates the process for schedule (MPS)
Detailed MPS(End items)
Weeks Trial-fit on
Customer orders End Revise Revise
MRP CRP
(End items, Item 1|2 34 56 master system system master
quantity and due Estimated demand schedule schedule
date) A Required prod.
End inventory
Are Are
No
B No materials capacities
Forecasts adequate? adequate?,
(End items,
quantity,
due date) Yes
Yes
Rought-cut capacity plan (labour hours)
Weeks Firm master
Inventory Work production schedule
3 5 6
status lcentre 1 2
1
To MRP and CRP
2
systems
3
Production
capacity Fig. 4.5. Master production schedule -flow chart
4.4.2. Gantt Charts
Gantt charts are simple bar graphs that can be used to schedule
Master production schedule (Firm)
its originator
End Weeks
5 6 any type of ooperation. These charts are named after
item 4
1 2
Henry L. Gantt.
A used to depict the
Gantt charts are usual (bar chart) aids
associated with work
sequenci load on jacilities, or progress
effort overng. a well-defined tìme period.
C
Dept. load
(Hrs.)
Assembly Two basic ypes of Gantt charts are:
Fabrication 1. Workload charts, and
2. Scheduling charts.
Fig. 4.4, Master production scheduling procesS
 Production Planning and ProductionScheduling
4.10 Control |4.11|

Workload Charts managers and workers plan their schedules around the
Gantt
[Link] workload chart is usually used to depict workload levels for requirements. known job
eguipment, workstations, or departments. Gantt Scheduling Chart
In these charts, the vertical axis usually lists different facilites
/A Gantt scheduling chart is used to track the
progress of jobs as
used to manufacture or process job orders. The horizontal axis
they pass through departments in an organisation.
usually represents time. The vertical axis of these charts usually lists the departments in the
workload chart. As we can
Fig.4.6 illustrates atypical Gantt
Vfrom see sequence that jobs flow through them and the horizontal axis
Fig.4.6, a series of machines is listed on the vertical axis and represents time.
listed in rows.
jobs to which they need to be assigned are /Atypical Ganttscheduling chart is shown in Fig.4.7.
Week Number Week number
5
Activity
2 3 4 6 2 3 4 6 7 8
Machine 1

Job 2 Scheduling
A NJob
Engg. release
B Job Procuremnent

Job 6 Receipt of materials

D
Tooling
Fabrication
E Vob9NM Assembly
Inspection
Fig. 4.6. Gantt workload chart Shipping
This chart clearly depicts the timing requirements for each job. and Fig. 4.7. Gant scheduling chart
quuick
This visual allocation of jobs provides managers with a toeach oWe can see from Fig,4.7, a job cannot be started in the next
casy way of determining the total workload assigned department until it is finished in the previous department.
machine. The space between jobs is idle time. requiremet Thus this chart makes it quite easy to see the time required for and
Gantt charts can dynamically adapt to scheduling System. or the current status of each
job.
changes as they occur in the operations management machines YIndustrial engineers should always try to minimize the unassigned
example, in Fig.4.6, we can see that most of the scheduled periods (in Fig.4.7) to make the best use of existing capacity and
assignable time in the first two weeks is completely time
periods ofwhilk Improve efficiency in general.
After the second week, machines are idle for jobs
These idle periods can be filled with other unplanned
 Production Planning and ProductionScheduling
4.12
4.4.3. Perpetual Scheduling
Control 2 Presentation in
Gantt Charts. The total
4.13
Perpetual Loading) department is added up and load against each
(Scheduling by knowing the weekly
against each capacity
order is placed in department, the number of weeks load of a
copy of every
a the an open
Inwhich method,with
this moves job going to different facilities. The copyfilef calculated. These informations department
can be transferred in the
form of
is
a
the order remains in the file until the job is completed. During the usually on a Gantt load chart, as
chart, shown in Fig.4.9. The shaded
reported with the help oft show the actual work against each department. The additional
the progressis
processing,ticket,
inspection
tickets
such as
material requisition ticket, rework ticket, move
bars
information regarding the workload, if any, can be indicated by dotted
line.
ticket, etc.
order specifies both the facilities used to do
In this file, the work GAUNT LOAD CHART
estimated time for the operation. Thus it is
each operation and the remaining ahead f
Week-1 Week-2 Week-3 Week-4
possible to determine the total amount of work Department
informations available in the
each facility simply by analysing the
A

current jobs can be determined.

file. In this way, status of each Department
B
Schedule
[Link]. Steps in Making Perpetual
steps: Department
Making perpetual schedule involves two C
sheet. Load analysis can be
1. Preparation of load analysis
information on the form (i.e., from the
prepared by posting the load
analysis sheet. Fig. 4.9. Gantt load chart
orders in hand). Fig.4.8 shows a typical load
Load Analysis Sheet [Link]. Advantages
Load in Hours/Days () It is very simple and understandable.
Department
Department (") tcan be maintained by even clerical staff, who are trained to
Order No. Department C
A B analyse the work order file.
20
26 (ii) It regquires less overall cost.
AB/12 35
20 (iv) These charts can be used for various type of work.
CJ/48 20 25

MLI52 20 30
10
44.3.3. Disadvantages
and thus it can
The information is available in gross, indicates that a
Sometimescomplete
CK/44 18 35
chart
mislead. The reason is that this it does not
ahead load, but
parinditcicatulear department has a four week
It may be very
likely that a

Fig. 4.8. Load analysis sheet

when the work will Occur.
Production Scheduling |4.41|
Note Don'tget confused with line-of-balan ce' and 'line balancing'. Both are
otally different. Line balancing also known as assembly line balancing is the
method of assigning the work elements to work stations so that all stations get
equal amount of work.

MATERIAL REQUIREMENTS PLANNING (MRP)

49, MATERIAL REQUIREMENTS PLANNING
4.9.1. What is MRP?
/ Material requirements planning (MRP) is a computational
technique that converts the master schedule for final products into
adetailed schedule for the raw materials and
parts used in the
final products.
The detailed schedule identifies the quantities of each raw
material
and part item. It also indicates when each item must be ordered and
delivered so as to meet the master schedule for the final products.
Summary, MRP is a computerised system for managing
dependent-demand inventory, scheduling replenishment orders,
and meeting demand for end items as given in the master
production schedule.
4.9,2, Basic Characteristics of MRP
lWo basic characteristics of MRP are :
. MRP drives demand for components, subassemblies, materials,
etc., from demand for and production schedules of parent
items.
2. MRP offsets replenishment orders (purchase orders or
production schedules) relative to the date when replenishment
is needed.

rlated directly tothe

Dependent
demand for some other product, e.g., raw materials,
is
demand means that demand for the itemcomponent parts, and sub-

Ssemblies.
 Production ProductionScheduling |4.43
4.42 Planning and
4.9.3. Information Needed for MRP
Control Production Schedule (MPS)
1. Master
The following informations are needed for MRP: / What is MPS ?
() Demand for all products. Master production schedule (MPS) is a detailed plan that states
(ii) Lead times for all finished goods, components, parts and ta. how many end items (i.e., the final product to be sold to the customer)
materials. millbe available for sale or distribution during specific periods.
(ii) Lot sizing policies for all parts. Purpose of themaster production schedule:
(iv) Opening inventory levels. The MPS is used:

() Safety stock requirements. () To set due dates for the availability of end items.
(ii) To provide information regarding resources and materials
(vi) Any orders previously placed but which haven't arrived yet. required to support the aggregate plan.
4.9.4. Inputs to MRP
(iii) As an input to MRP, which will set specific production
The three important inputs to MRP are:
schedules for parts and components used in end items.
1. Master production schedule,
VInputs to MPS:
2. Bill of materials file, and
The MPS inputs are:
3. Inventory record file.
1. Market requirements,
Fig.4.16. depicts the structure of a MRP system, showing the flow
of data into the MRP processor and its conversion into useful 2. Production plan from aggregate planning, and
output 3. Resources available.
reports.
MRP Output:
Customer
orders
Sales Service The output of MRP is the ist of end items available every period
forecasts parts
requirements that is feasible with respect to demand and capacity.
Master 2. Bill of Materials File
Engineering
changes production
schedule
Inventory
transactions Y What is billof nmaterials file ?
items and how
Bill of The bill of materials (BOM) designates what product.
final
many of each are used to make up a specified
MRP
materials
processor Inventory
record
file
the raw material
The bill of materials file is used to compute
file

products listed in the

Output and component requirements for end
reports
master schedule.
product structure by listing the
Provides information on the
Fig. 4.16. Structure of amaterial red subassemblies that make up each product.
planning MRP) System parts and
component
 Production Planning and Control ProductionScheduling
4.44 445
Product structure: ITEM
Part No.
Descriptions Lead time Std. cost Safety
The structure of an assembled product, in the form of a pVramia MASTER
Order
|Last year's
stock
DATA Setup |Cycle
can be depicted as shown in Fig.4.17. SEGMENT
quantity
usage |Class
Scrap allowance Cutting data Pointers
It can be seen from Fig,4.17 that the product P1 is the parenta Control
Etc.
narent
subassemblies SA1, SA2, and SA3. Similarly SA1 is the Allocated
balance
Period
1 2 3 4 5 6 7 8 Total
components C1; C and C3, and so on. Gross
Level 1
requirements
P1 NVENTORY
(Produc) Scheduled
STATUS
SEGMENT
receipts
Level 2 On hand
SA2 SA3
SA1 (2 (1) (Subassembies)
(2)
Planned order
Level 3 releases
C5 C6 C8 (Components)
c2 C3

2) (4) Order details

:(3) 2) I(2) () (3) (3) Level 4 SUBSIDIARY
(Raw materials) DATA
Pending action
SEGMENT
Counters
items required.
Note: The number in parenthesis below each block represents the number ofeach Keeping track

Fig. 4.17. Product structure for productPI Fig. 4.18. Record of aninventory item
4.9.5. Working of MRP
3. Inventory Record File
recorded in the inventoy As discussed so far, the MPS provides a period-by-period list of
V Allthe data related to the inventory are
record file. products required. The BOM defines what materials and
segmenb
The inventory record file contains the following three identification componernts are needed for each product. Then the inventory record
file contains information on the current and future inventory status of
1. ltem master data Segment:It provides the items cost, and each
by part number and other data, such as lead
time, Component. By using these three inputs, the MRP processor
quantity. recordof comput
for the egiven
s final product.
the number of each component and raw material required
To better understand how MRP works, one
2. Inventory status data : It provides a time-phased Can refer the
inventory status. datasuch
as following example.
p2
3. Subsidiary data segment : It provides subsidiarychanges. Example 4.7| For the product structures of products P] and
purchase orders, Scrap or rejects, and engineering showing the shown in Fig.4.19 and Fig.4.20, determine the timephased
V Fig.4.18 depicts the typical inventory record file file. raw material used in
different types of data contained in the inventory
record
tequirements
[Link]
for Component C4. The
C4 is M4. One unit of C4 is obtained fromevery
unu of
 4.46 Production Planning and Control [Link]

P1 P2 Perlod
1 2 3 4
7
4.47|
Mem:ProductP1 8
10
lGrossRequirements
SA3 scheduledRecejpts 50 100
SA1 SA2
(1) (2) (1 SAA
onHand
NetRequirements
|C1 c2 C4 cscs CA
8
C6
CA
Planned Order Releases
50
100
100

(1) (4) (1) (2) (2 (1) (1) (2) (2 Item:ProductP2

(1
Gross Requirements 70 25
Fig. 4.19. Product structure Fig. 4.20. Product structure Scheduled Receipts
for product Pl OnHand
for product P2
Net Requirements 70 80 25
Use the mnaster schedule of Fig.4.21. Planned Order Releases 70 80 25
Mem: Subassembly S2
Gross Requirements 100 200
Week number 6 7 10
Scheduled Receipts
Product P1 50 l100 On Hand

Product P2 7080 25 Net Requirements 100 200

Planned Order Releases 100 200
etc.
lem: Subassembly S3
Gross Requirements 70 80 25
Fig. 4.21. MPS for products Pl and P2, showing week |Scheduled Receipts
|On Hand
delivery quantities
Net Requirements
T'he ordering and manufacturing lead times for the Mk
70 80 25
Planned Order Releases 70 80 25
computations are as follows : Mem: Component C4
Pl: assembly lead time = I week Gross Requirements 70 280 25 400
P2: assembly lead time = Iweek Schedi
On Handuled Receipts
SA2: asSsembly lead time = Iweek Net Requirements
SA3: assembly lead time = lweek 70 280 25 400
Panned Order Releases 25 400
C4: manufacturing lead time = 2weeks en: Raw 70 280

M4 : ordering lead time = 2weeks Qbov Material M4

Stoss Reqirements
Assume that the current inventory status, for allthe items
is : units on hand= 0, units on order = 0.
ScOnheleHanddRequirements
uled Receipts 70 280 25 400

presentedin
Solution : The MRP
Fig.4.22.
solution for the Component C4 is anned Order Release 70 280
70
25
280
400
25 400

Fig. 4.22. MRP solution

 ProductionScheduling
4.48|
Production Planning and Control |4.49
Cancellation notices, to indicate the
Procedure Steps : orders because of cancellation
changes in the master schedule. of open
Pl and P2, the gross requirements can be
1. In Fig.4.22, for products Fig.4.21. 5. Reports on inventory status.
written by using the given MPS include :
inventory, therefore gross and ) Secondary ouputs
2. Since there is no on-hand , Performance reports of various types, to indicate costs, item
correspondingly.
requirements are same for products Pland P2 usage, etc.
products Pl and P2 must be oftet
3. The delivery requirements for 2. Exception reports, to show deviations from schedule. orders
can be seen in Fig.4.22 f
by the 1-week assembly lead time. This that are overdue, scrap and so on.
order release row.
both products Pl and P2, in the planned 3. Inventory forecasts, to indicate the projected inventory levels
4. Now let us move to
subassemblies. For component C4, only
the product in future periods.
subassemblies SA2 and SA3 are to be exploded. Using
for SA2 and SA3 can be 4.9.7. Benefits of MRP
structures, the gross requirements
100; For SA3:70 × l and so
calculated. (Ex: For SA2: 50 x 2 = The various benefits of implementing MRP system are :
requirements and planned order release
on). Now the rows of net discussed earlier.
Reduced inventory levels Better production scheduling
as
for SA2 and SA3 can be filled Reduced production lead time IReduced setup cost
exploded. For
the component C4 can be
5. As discussed in the step 4, Reduced product changeover cost Better machine utilisation
so offset the net
time is 2 weeks,
C4, the manufacturing lead obtain the planned order Improved product quality Quicker response to changes
requirements value by two weeks, to in demand
release. Thus
exploded. DISPATCHING AND EXPEDITING
material M4 can be
6. In the similar way, the raw releasejfor
the 0
weeks, the order
with an ordering lead time of 2 Ans. o 4.10. DISPATCHING
units must be plannedfor week 1.
4.10.1. what is it?
4.9.6. MRP Output Reports
is the routine of'settingproductive activities in motion
()Primary outputs include :
1. Order release notice, to place
orders that have been
plannedby Dithrough
spatchitheng release of orders andinstructions, in route sheets
with
accordance

the MRP system. previously planned times and sequences, embodied in

and schedule charts.
in future periods. for
Once the production order is complete and the schedules are
2. Report of planned order releases
dates
in due
dispatching functionto
3. Rescheduling notices, to indicate the changes
open orders.
plhggeranned,offthen it is the responsibility andoftheinstructions and with them
the the flow of information
aids, drawings and
issue of materials, tools, production

Specifications, inspection orders, etc.

 Imventory Control and Recent Trends in PPC
5.26 Production Planning and Contol 5.27
/Atypical ABC classification is depicted in Fig.5.7. The two
5.9. ABCANALYSIS
P and Q where the curve changes its shape, provides three
points
5.9.1. What is it? segments A, B and C. From points Pand Qand the tabulated data,
/ The ABC classification system is a widely used method of the usage value classification points A, B andC may be fixed and
categorizing inventories according to quantity and value. generalised over the entire population of the stock items.
VABC analysis is based on the Pareto principle that a few hiob 59,2. Procedure for ABC Analysis
usage value items constitute a major part of the capital invested in Following steps may be used to make ABC analysis.
iventories whereas bulk of inventory items having low usapp
Step 1. Identify all the items being used, list them and estimate
value constitute insignificant part ofthe capital.
their annual consumption in units. It may be done for each category of
V In ABC analysis, the items are categorised into three groups A, B item like raw materials, components, spares, etc.
and C on the basis of their usage value, as shown below.
Step 2. Collect cost data of individual items.
rupees for each item.
Category Consumption Percentage of Percentage of Step 3. Find out annual usage/consumption in
of items value items usage value annual usage in units by unit price of
lt may be done by multiplying
Class A High 10 to 20% 70 to 80% the item.
Class B annual usage value, arrange the items
Step 4. Starting from highest
Medium 20 to 30% 15 to 20%
consumption in value.
n descending order of annual
Class C Low 60 to 70% 5 to 10%
express it in
cumulative annual usage and
Step 5. Calculate of items into
usage. Also express number
Percentage of total annual
100

90
annual cumulative item percentages. cumulative item
usage percerntage against It will be seen
Step 6. Plot cumulative
80 -
inventory category.
of P B, and Cand
into A,
70
percentage percentage and segregate that it flattens off.
length the curve has a steep rise after direction will
60 certain
in
cost iat Tor the curve changes its
Mid value
The two tangential lines where items.
'B'and C' category of
50
Mid volume
determine the rangeof'A',
Low value, Low
Total 40 Class B
volume: Class C
Systems
of ABC
Characteristics
30
High value 5.9.3. control strategy
for the A, B and Ctypes of
20 Low volume
Class A Table 5.8 preesentsthe
10
items.
10 20 30 40 50 60 70 80 90 100
Total percentage of number of items

Fig. 5.7. ABC analysis

 Production Control and Recent Trends in PPC 5.29
Planning and Imventory
5.28 Control 6.9.5. Limitations of ABC Analysis
ofA, B, and Ctype of items
Table 5.8. Characteristics / ABC analysis, in order to be fully effective, should be carried
out
B-type with standardisation and codification.
SI.
A-type
inventory C-type
No.
Factors inventory
10-20% 20-30% inventory
60-70%
/The results of ABCanalysis have to be reviewed periodically and
1. Quantity updated.
(% of items)
70- 80% 15 20% 5-10% Example S.3 Perform ABC analysis on the following sample of
2. Value
tems in an inventory.
(% of Rs.
value) Annual consumption (units)
Item Pricelunit (in Rupees)
Degree of Tight Moderate Low
3. A 5950 5
control
B 21250 4
4. Types of Complete and Complete and Simplified C 1000 8.75
records accurate accurate
D 2087 5
5. Safety stock Low Moderate Large 27600 2.50
6 Ordering Careful, accu Normal Order periodi F 28000 0.50
procedure rate, frequent ordering; some cally; 1- to 2 G 36000 0.25
reviews expediting year supply H 911 4.10
7. Ordering Frequent Moderate Low 300 2.90
frequency 29450 0.30
Rigorous Moderate Minimum K 11500 815
8 Value analysis
3934
9 Forecasting Accurate Moderate Rough
and material OSolution: () The usage values of the items can be calculated hy
planning multiplying the annual consumption and coresponding price Irefer
10. Supervisor Top Middle User column (4) in Table 5.9] and rank the items in the descending order of
management management department the Usage values [refer column (5) in Table 5.9].
5.9.4. Advantages of ABC Analysis Table 5.9.
/ This approach helps exercise selective Price/unit
the materials manager to whenheis Annual Annual usage
control and focus his attention only on a few items Item consumption unit (Rs.) (Rs.) Rank
(3) (9)
confronted with many store items. analysis
(1) (2) 5.00 29750 (5)
V Industrial experiences ABC in
A 5950 4.00
reveal that implementing results 21250 8.75
85000
results in reduced clerical costs, saves time and effort, 1000
8750
over.
better planning and control, and increased Iinventory turn
 Production Planning and Contol Inventory Control, and Recent Trends in PPC
5.30 |5.31
Price/unit Annual usage
Annual
consumption unit (Rs.) (Rs.) Rank aategory items (2S70); 1tens A, L, F, and C are B category items; and
Item
5.00 10435 iterms D, G, J, H, and I areC category items.
2087
D 69000
E
27600 2.50 3 Theclassification results are presented below.
0.50 14000
F 28000
0.25 9000 Class Item % of annual value
G 36000 % of items in class
4.10 6735
H 911 A K, B, E 69.6 25
2.90 870 12
300 B A, L, F, C 20.3
0.30 8835 10 33.3
J 29450
11500 8.15 93725 1 C D, G, J, H, I 10.1 41.7
K
3934 5.00 19670 5
L

(i) Now cumulative annual usage and cumulative percentages ane 5.10. OTHER SELECTVE INVENTORY CONTROL
calculated, as shown in Table 5.10. APPROACHES
Table 5.10.
Table 5.1lpresents the features of otherselective inventory control
Order Annual Cumulative Cumulative approaches.
of Item usage annual usage % of item Class
Table 5.11. Other selective inventory control approaches
ranking (in Rs.) wage percentage
1 K 93725 93725 26.3 1. VED analysis. It is based on the criticality of the items.
25%
2 B 85000 178725 50.2
[(3/12) x 100]
A
In this, items are grouped as V (vital), E (Essential) and D
3 69000 247725 69.6 (Desirable).
4 A 29750 277475
It is mainly used to control the inventories of spare parts and to
78
control capital intensive process industries.
L 19670 297145 item.
Z. HML enalysis, It is based on the unit price of
83.5 33% B
[(4/12) x 100]
6 14000 (Medium) and L (Low).
Y In this, items are grouped as H (High), M
311145 87.4

of purchased items.
Ylt ismainly used to controlthe inventories
C 8750 319895 89.9
8 D 10435 consumption rate of the inventory.
330330 92.8
J. FSN analysis. t is based on (Slow
9 G 9000 339330 95.4
Y This system classifies items nto F (Fast moving), S
41.7% C
10 8835 moving) and N (Non-moving).
348165 97.8 [(S/12) x 100]
controlling obsolescence.
1 H 6735 354900 99.7 l t is helpful in
analysis. lt is based on the level of difficulty in the
12 870 355770 100
4. SDE
Procurement ofinventory.
items into S (Scarce), D(Difficult), and
(iii) lt is apparent from the above items K, B, A
therefore system classifies
This
table that
account for 69.6% of total annual consumption and are E (Easy).