Typically a group items are tracked on a perpetual

Info iconThis preview shows page 1. Sign up to view the full content.

View Full Document Right Arrow Icon
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: ry group of each item determines the item’s level of monitoring. The A group items receive the most intense monitoring because of the high dollar investment. Typically, A group items are tracked on a perpetual inventory system that allows daily verification of each item’s inventory level. B group items are frequently controlled through periodic, perhaps weekly, checking of their levels. C group items are monitored with unsophisticated techniques, such as the two-bin method. With the two-bin method, the item is stored in two bins. As an item is needed, inventory is removed from the first bin. When that bin is empty, an order is placed to refill the first bin while inventory is drawn from the second bin. The second bin is used until empty, and so on. The large dollar investment in A and B group items suggests the need for a better method of inventory management than the ABC system. The EOQ model, discussed next, is an appropriate model for the management of A and B group items. The Economic Or...
View Full Document

This document was uploaded on 01/19/2014.

Ask a homework question - tutors are online