Material Valuation

About this course

Introduction to material controlMeaning of materialObjectives of Materials Control1. Continuous Availability of Materials2. Lowest Cost of Purchase3. Lowest purchase price4. Lowest possibility of spoilage5. No Risk of Obsolescence6. Least WastageTechniques or Methods of Material Control :1) A.B.C analysis :  Contents ;a. On the basis of importance b. Division in categories c. For better managementCATEGORY ACATEGORY BCATEGORY CClassification of material according to value and volume2) Determination of stock level :Contents :a. No under stock b. No over stockc. Stock always available at the movementRe order levelMinimum stock levelMaximum stock levelAverage stock levelDanger LevelUsage or Consumption : Types of Usage : Normal Usage, Minimum Usage, Maximum UsageFormula for calculation of stock levels3) Economic Order Quantity Analysis Meaning of E.O.QMeaning of ordering costMeaning of holding/Carrying cost4) Perpetual inventory technique 5) V.E.D analysis 6) H.M.L. Analysis Technique 7) F.S.N. Analysis Technique 8) S.D.E. Analysis Technique 9) S-OS Analysis Technique 10) Budgetary Techniques Issue of MaterialsMethods of valuation of material or Methods of pricing material issuesA. At cost price :i. Real cost method ii. First in first out method (FIFO) : Advantages or Disadvantages of First In-first out method (FIFO)iii. Last in first out method (LIFO) : Advantages or Disadvantages of Last In-first out method (LIFO)iv. Highest in first out of method v. Minimum in first out method vi. Base stock method Bin CardStores Ledger AccountB. Average price method C. Standard price method D.