The lifo system is founded on the assumption that the

The LIFO system is founded on the assumption that the latest items to be stored are the first items to be sold. It
is a recommended technique for businesses dealing in products that are not perishable or ones that don’t face
the risk of obsolescence.
Advantages of LIFO
- It complies better with the matching principle, as it charges costs with the revenues of a similar period
- Reduces the likelihood of write-downs of inventory if their fair market value has decreased
- In some industries, it conforms with the actual physical flow of inventory, such as in extraction
industries (i.e., coal, oil and gas)

MBA – Operations Management
Paper Code: 402 | Semester IV| MATERIAL MANAGEMENT
Student Name: Anish Ghildyal
FIFO is mostly recommended for businesses that deal in perishable products. The approach provides such
ventures with a more accurate value of their profits and inventory. FIFO is not only suited for companies that
deal with perishable items but also those that don’t fall under the category.
Advantages of FIFO
- It is easy to use, generally accepted and trusted, and it follows the natural physical flow of inventory.
- Reduces wastage when it comes to the deterioration of materials. Since the first items acquired are also
the first ones to be sold, there is effective utilization and management of inventory.
Q.7. Briefly explain the different types of material handling equipments.
Material handling equipment (MHE) is mechanical equipment used for the movement, storage, control and
protection of materials, goods and products throughout the process of manufacturing, distribution.
Types of MHEs:
• Storage and Handling Equipment: Basic storage equipment. They are often designed to utilize vertical space
so the warehouse can hold more items. Bins, drawers, stacking frames, flow racks, cantilever racks, and
mezzanines are also included in this category.
• Bulk Material Handling Equipment: This is the storing, transportation and control of materials in loose bulk
form. Examples:
- Stackers and reclaimers: Large machines that are used to dump things into piles or to pick them back up
again. They can be hard to visualiz e, so here’s an animation of one working.
- Hoppers: Picture a large metal funnel. It stores material and can release an exact quantity out the bottom.
- Grain elevators: Buildings used to store grain. They include a series of buckets on a track that automatically
transports grain to the top of the building where it can be funneled into different silos.
- Bucket elevators: Similar to a grain elevator, this device features buckets that transport large amounts of
material.
- Conveyor Belts: Moving belts that transport material. They can be combined into more complicated
conveyor systems which are considered engineered systems. If you want a conveyor system for your
business, contact DCS.
Anish Ghildyal Page 6 of 8