Materials Critical to Production:

Materials Critical to Production

Big inventories are justified due to the effects of these materials as they are capable of break down the whole production lines.

Materials having Short Span of Lives

For such of the materials, small inventories are appropriate because these materials may be subject to extremely fast obsolescence or deterioration.

Very Large and Bulky Materials

Small inventories are justified for such type of materials due to the large space occupied by them.

Materials with Highly Erratic Lead Times

Materials with unpredictable demand needs large order quantities and order points.

Valuable Materials Subject to Pilferage

For dropping the risk of loss, small inventories are appropriate.

Standard Packaging, Shipping Container, or Vehicle Size

If order size departs from norm, quantities other than Economic order quantity are appropriate for them.

Figure: Fundamental Aspect of ABC Method