How many types of inventory control techniques are there?

Question

Accepted Answer

Inventory control techniques help manage stock levels, reduce costs, and improve efficiency in supply chain management.

Just-In-Time (JIT): This technique minimizes inventory by ordering goods only as needed, reducing holding costs. Example: Toyota's production system.
ABC Analysis: Items are categorized into three classes (A, B, C) based on importance and value, allowing focused management. Example: High-value electronics vs. low-value accessories.
Economic Order Quantity (EOQ): This formula determines the optimal order quantity that minimizes total inventory costs. Example: A retailer calculating the best order size for seasonal items.
First-In-First-Out (FIFO): This method ensures that older stock is sold first, reducing spoilage and obsolescence. Example: Grocery stores using FIFO for perishable goods.
Safety Stock: Extra inventory is kept to prevent stockouts due to demand fluctuations or supply chain disruptions. Example: A pharmacy maintaining extra stock of essential medications.

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