Question

1. Discuss the classifications of inventory control and indicate the purpose for each type.

and then locate a company (or using an industry is fine too) that utilizes JUST IN TIME (JIT) inventory controls. Why do you think they use this method? What are the advantages? What are the disadvantages?

Answer 1

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Here we will discuss the classification of inventory control along with the purpose of each type and we will locate a company that utilizes just in time inventory control along with why would they use this method and what are the advantages and disadvantages of this method.

First of all, we will discuss the classification of inventory control along with the purpose of each type:-

1) ABC System:- ABC analysis system is that a noun is a system of inventory control that is used to categorize the inventory according to their priorities users to the organization. A category is that category which has more priority towards the organization, B category is that degree which has less priority than that of A category and C category is that category which has the least priority towards the organization.

PURPOSE:- The main purpose of ABC analysis used to categorize the inventory according to their priority so that there is no confusion in the organization.

2) HML System:-HML analysis and ABC analysis are very similar to each other because just like ABC analysis as HML analysis categorizes the inventory into three categories such as high, medium, and low.

PURPOSE:- The purpose of HML analysis to make sure that the uses value price is used properly and analyzed properly.

3) SOS System:- the SOS analysis of inventory control device or categorize the inventory into two parts such as S for the seasonal inventory items and OS is for seasonal inventory items.

PURPOSE:- the main purpose of SOS analysis is to make sure that the inventory is properly categorized among the season and off-season items for no confusion.

Toyota is one of those companies that utilize the just in time inventory controls. Toyota uses just in time inventory control analysis because the main motive of just in time analysis inventory control is to make sure that there is a reduction of the waste and increment in the efficiency and effectiveness in the organization. Just in time inventory control analysis is very helpful in the increasing efficiency in the organization and it also helps in reducing the time wastage and inventory wastage.

Advantages of just in time inventory control analysis:- All the processes and procedures regarding the production and supply become really fast and quick, it increases the efficiency in the organization, it reduces the time wastage and inventory wastage.

Disadvantages of just in time inventory control analysis:- there can be a lot of disturbance due to the natural disasters, there can be disruptions due to technological changes and sometimes a company cannot fulfill the requirement of unexpected large orders.