• info@mineportal.in
  • +91 8804777500
  • Download Mine Portal Application
Test Series Discussion Forum User Notes Apply for teaching faculty or volunteer PRP Calculator Register Login
    Logo
    • Home
    • FIRST/SECOND CLASS
      • COAL
        • TEST SERIES
        • SYLLABUS
        • EXAM PAPER ANALYSIS
      • METAL
        • TEST SERIES
        • SYLLABUS
        • EXAM PAPER ANALYSIS
      • COMMON STUDY MATERIAL
        • DAILY MINING QUE
        • THINGS TO KNOW
        • SUCCESS STORY/REPORT CARD
      • COAL FMC/SMC EXAM PAPERS
        • 2015
        • 2021
        • 2021 (DEC)
      • METAL FMC/SMC EXAM PAPERS
        • 2021
        • 2021 (DEC)
        • 2024
      • RESULT/NOTIFICATION
        • 2020
        • 2021
        • 2022
    • OM/MS/SURVEYOR
      • TEST SERIES
        • OVERMAN EXAM
        • SIRDAR EXAM
        • SURVEYOR
      • SYLLABUS & EXAM PATTERN
        • OVERMAN EXAM
        • MINING SIRDAR EXAM
        • SURVEYOR
      • OM EXAM PAPERS & ANALYSIS
        • 2017
        • 2018
        • 2019
        • 2021
        • 2023
        • 2024
      • MS EXAM PAPERS & ANALYSIS
        • 2017
        • 2018
        • 2020
        • 2021
        • 2022
        • 2023
        • 2024
      • SURVEYOR PREVIOUS YEARS PAPERS
        • 2016
        • 2020
        • 2018
        • 2022
        • 2023
      • NEWS/RESULT
        • 2020
        • 2022
        • 2024
      • STUDY MATERIAL
        • SHORT NOTES
    • MATE/FOREMAN
      • TEST SERIES
        • MINE FOREMAN
        • MINING MATE
      • SYLLABUS
        • MINING MATE
        • MINE FOREMAN
      • FOREMAN EXAM PAPERS
        • MISCELLANEOUS
        • 2021
        • 2023
      • MINE MATE EXAM PAPERS
        • 2021
        • 2023
      • BLASTERS EXAM PAPERS
        • 2021
        • 2023
      • NEWS/RESULT/NOTES
        • 2022
        • NOTES
    • GATE MINING
      • TEST SERIES
      • EXAM SYLLABUS
        • 2017
        • 2018
        • 2019
        • 2020
        • 2021
        • 2022
        • 2023
      • EXAM PAPERS/ANALYSIS
        • 2007-2019
        • 2020
        • 2021
        • 2022
        • 2023
        • 2024
      • GATE REPORT/CUT OFF/RTI
        • 2018
        • 2019
        • 2020
        • 2021
        • 2022
        • 2023
      • SUCCESS STORY
        • 2018
        • 2022
      • GENERAL QUERY
        • HOW TO PREPARE
        • BOOKS TO BE FOLLOWED
        • EXAM PATTERN/UPDATES
        • PSUs RECRUITMENT
        • COLLEGE M.TECH CUT OFF
      • GATE SPECIFIC NOTES
    • CIL & SUBSIDIARIES
      • CIL NON-EXE TO EXE EXAM
        • TEST SERIES
        • NOTIFICATION/NEWS
        • SYLLABUS
        • SHORT NOTES
        • EXAM PAPER
      • BCCL CLERICAL EXAM
        • TEST SERIES
        • NOTIFICATION/NEWS
        • SYLLABUS/EXAM PATTERN
        • SHORT NOTES
      • CIL RELATED NEWS/INFO
        • 2024
        • MISCELLANEOUS
    • COAL INDIA MT
      • PREVIOUS YEARS PAPERS
        • PERSONNEL & HR
        • PROBATION CLOSER EXAM
        • MINING
        • COAL PREPARATION
        • FINANCE
        • MATERIAL MANAGEMENT
      • SYLLABUS
        • 2017
        • 2020
        • 2025
      • STUDY MATERIAL
      • SUCCESS STORY/INTERVIEW QUE
        • ON-CAMPUS PLACEMENT
        • 2012
        • 2017
        • 2020
      • NEWS/FAQ/ADVICE/RTI/CUT-OFF
        • GENERAL
        • 2017
        • 2020
        • 2021
        • 2022
        • 2023
        • 2025
      • RESULT
        • YEAR_2020
        • YEAR_2022
    • GAS TESTING
      • STUDY NOTES
        • SHORT NOTES
        • EXAM QUESTIONS
      • SUCCESS STORY
        • 2017
        • 2018
      • SYLLABUS/NEWS/FAQ
      • GAS TESTING EXAM LIST
        • 2020
    • MINING NOTES
      • LEGISLATION
        • COAL MINE REGULATIONS
        • METAL MINE REGULATIONS
        • OHSWC CODE/MINES ACT
        • MINE RULES
        • MINE RESCUE RULES
        • MINE VTC RULES
        • CIRCULAR/NSC/BYE LAWS
        • CEA
        • MMDR-MCDR
      • MINING VARIOUS TOPICS PPTs
        • COMPUTER APPLICATIONS
        • MINE VENTILATION & ENV
        • MINE MACHINERY
        • MINING MEHODS
        • MINE SURVEYING
        • EXPLOSIVE & BLASTING
        • MISCELLANEOUS
        • MINE MANAGEMENT
      • IIT(BHU) STUDENTS' NOTES
        • MINE MACHINERY
        • ELECTRICAL ENGINEERING
        • MINE ENVIRONMENT
        • ROCK MECHANICS
        • MINE SURVEYING
        • MINING METHODS
        • MINE ECONOMICS & PLANNING
        • MINE GEOLOGY
      • MINE MANAGEMENT-FIRST-AID etc
        • MINE MANAGEMENT NOTES
        • FIRST AID
        • EIA
      • ROCK MECHANICS
        • ROCK PROPERTIES
        • ROCK MECHANICS
      • MINING METHODS & GEOLOGY
        • COAL MINING
        • METAL MINING
        • EXPLOSIVES
      • MINE VENTILATION & ENVIRONMENT
        • MINE FIRE
        • MINE VENTILATON
        • MINE ENVIRONMENT
      • MINE SURVEYING & MACHINERY
        • MINE SURVEYING
        • MINE MACHINERY
      • MISCELLANEOUS
        • FORMULAES
    • DGMS MATERIAL
      • CIRCULAR/BYE LAWS
        • MISCELLANEOUS
        • 1935-2018
        • 2019
        • 2020
        • 2021
        • 2022
        • 2023
        • 2024
        • 2025
      • DGMS FORM & FORMATS
        • VARIOUS FORMS
        • MEDICAL CERTIFICATE
        • GAS TESTING
        • CHARACTER CERTIFICATE
        • EXPERIENCE CERTIFICATE
        • AFFIDAVIT
        • MINE RULES-FORMS
      • DGMS STANDARD NOTE
        • 2016
        • 2017
        • 2018
        • 2019
        • 2020
      • THINGS TO KNOW
        • FIRST AID
        • DGMS ADDRESS
        • DGMS EXAM ELIGIBILITY
        • FORM FILLING GUIDELINES
        • HELPLINE
      • NEWS/RTI/FAQs/NOTIFICATION
        • 2025
        • 2020
        • 2023
        • 2024
    • More categories
      • MINING INFO/PAPERS
        • COAL INDIA NEWS
        • APPRENTICE
        • NEWS/UPDATE
        • INTERVIEWS
        • COLLEGE SEMESTER EXAM
        • MISCELLANEOUS
        PSU/COMPANIES
        • NMDC
        • BPSC
        • TATA STEEL
        • UPPSC MINING INSPECTOR
        • ODISHA Jr MINING OFFICER
        • JHARKHAND MINING INSPECTOR
        • HPSC MINING OFFICER
        • MOIL
        • MIZORAM ASSISTANT CONTROLLER
        • RJPSC
        • SCCL
        • MPSC
        • TNPSC
        • RSSB
        • MECON
        • KERALA
        • THDC
        • CGPSC
        • ECET MINING
        • GPCL

    Additional Links

    • Home
    • About us
    • Discussion Forum
    • User Notes
    • Mineportal Notes
    • Video Lectures
    • Mining Dictionary
    • Mining Jobs
    • Take Free Test
    • Offers
    • Terms of Use
    • FAQ

    Connect With Us

    Download The App

    • Download Mine Portal Application

    Details

    • Home
    • MINING NOTES
    • MINE MANAGEMENT-FIRST-AID etc
    • MINE MANAGEMENT NOTES
    • INVENTORY MODELS

    INVENTORY MODELS

    • 10-07-2022
    • 2797
    • 1

    An inventory consists of usable but idle resources such as men, machines, materials or money. When the resource involved is a material, the inventory is also called stock.
    Inventory Costs: The four costs considered in inventory control models are:
    1.Purchase costs
    2.Inventory carrying or stock holding costs
    3.Procurement costs or setup costs
    4.Shortage costs
    Purchase costs: It is the price that is paid for purchasing/producing an item.
    Inventory carrying costs: They arise on account of maintaining the stocks and the interest paid on the capital tied up with the stocks. They vary directly with the size of the inventory as well as the time for which the item is held in stock. Various components of the stockholding cost are cost of storage space consists of rent for space, depreciation and deterioration costs (important for fashion items or items undergoing chemical changes during storage), obsolescence cost, record-keeping and administrative cost, taxes and insurance in charge all costs associated with movement of stock.
    Procurement costs or set-up costs: These include the fixed cost associated with placing of an order of setting up a machinery before starting production. These include costs of purchase, requisition, follow up, receiving the goods, quality control, cost of mailing, telephone calls and other follow up actions, salaries of persons for accounting and auditing etc.
    Shortage costs or stock-out costs: These costs are associated with either a delay in meeting demands or the inability to meet it at all. Therefore, shortage costs are usually interpreted in two ways. In case the unfilled demand can be filled at a later stage (backlog case), these costs are proportional to quantity that is short as well as the delay time. In case the unfilled demand is lost (no backlog case), these costs become proportional to only the quantity that is short.
    Inventory control problem: The inventory control problem consists determination of three basic factors:
    When the order (produce or purchase)?
    This is related to the lead time of an item. Lead time may be defined as the time interval between the placement of an order of an order for an item and its receipt in stock.
    There should be enough stock for each item so that customers’ orders can be reasonably met from this stock until replenishment. This stock level, known as reorder level has therefore to be determined for each item.

    How much to order?
    Each order has associated with it the ordering cost or acquisition cost. To keep it low, the
    number of orders should be as few as possible i.e., the order size should be large. But large
    order size would imply high inventory cost.
    How much safety stock should be kept?
    This is important to avoid overstocking while ensuring that no stock-outs take place.




    Related Sources



    comments

    No comments added yet!

    Category

    • MINE MANAGEMENT NOTES
    • FIRST AID
    • EIA

    Related Blogs

    ABC Inventory Analysis

    ABC Inventory Analysis

    FINANCIAL MANAGEMENT

    FINANCIAL MANAGEMENT

    MATERIAL MANAGEMENT

    MATERIAL MANAGEMENT

    Leadership-Coordination and Controlling

    Leadership-Coordination and Controlling

    SEWAGE TREATMENT PLANT

    SEWAGE TREATMENT PLANT

    Logo

    Mine Portal is the favourite choice of thousands of mining professional aspirants for online DGMS Managership competency exam preparation. Our popular products include Online Test Series ...
    Read More

    CATEGORIES

    • FIRST/SECOND CLASS
    • MINING NOTES
    • MATE/FOREMAN
    • OM/MS/SURVEYOR
    • GATE MINING
    • DGMS MATERIAL

    Recent

    • cil-non-exe-to-executive-welfare-andamp-personnel-exam-2021
      CIl NON-EXE TO EXECUTIVE WELFARE & PERSONNEL EXAM- 2021
    • bpsc-mining-lecturer-exam-2025
      BPSC MINING LECTURER EXAM-2025
    • cil-mt-material-management-exam-2025
      CIL MT MATERIAL MANAGEMENT Exam-2025

    © Copyright 2025. All Rights Reserved by Mine Portal, Design & developed by Mehta Websolution

    Open with

    Avatar

    Mineportal App

    Avatar

    Continue with browser

    Login with social

    Login to your registered account!

    • Login With Password
    • Login With OTP
    Lost your password?

    Not a member yet? Register now

    Email not verified? Verify Email

    Register with social

    Register a new account

    Are you a member? Login now

    Mobile phone verification

    Change Number

    Don't receive the code?

    Forgot Password

    Loading...

    Are you a member? Login now

    Social Login

    We haven't get your email address or mobile number from your social account.

    Mobile phone verification

    Change Number

    Don't receive the code?

    Resend Verification Link

    Loading...

    Are you a member? Login now

    Recover Password

    Don't receive the code?

    Reset Password

    Mobile phone verification

    Don't receive the code?

    Join Us On WhatsApp

    Note: Join for exam which you are preparing. To maintain uniqueness and diversification of group a person can only join one group. Any member found joining multiple groups will be removed.

    JOIN CHAT

    Join Us On Telegram

    Note: Join for exam which you are preparing. To maintain uniqueness and diversification of group a person can only join one group. Any member found joining multiple groups will be removed.

    JOIN CHAT

    Add Comment