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By:
Bhawna Karamchandani
Sonali Gawande
Farheen Rais
Nikhil Jain
Nisha Kumar
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Ä Ynventory refers to the stock of resources, that possess
economic value, held by an organization at any point of
time. These resource stocks can be manpower, machines,
capital goods or materials at various stages. it includes raw
mat.,WY and finished goods.
Ä The inventory management techniques improve the
inventory turnover ratio and transform frozen assets into
cash.
Ä Ynv. tech. helps for saving money, satisfying customers and
speeding up the flow of inventory.
Ä The diff. types of tech. are-
i. ABC analysis(always better control)
ii. JYT
iii. EOQ(economic order quantity)
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` V

  is the world's largest chain of hamburger
fast food restaurants
` VcDonald's is one of the world's most well-known and valuable
brands and holds a leading share in the globally branded quick
service restaurant segment
` VcDonald's primarily sells hamburgers, cheeseburgers, chicken
products, french fries, breakfast items, soft drinks, shakes, and
desserts. Yn response to obesity trends in Western nations and in the
face of criticism over the healthiness of its products, the company
has modified its menu to include alternatives considered healthier
such as salads, wraps and fruit.
` VcDonald's restaurants offer both counter service and drive-through
service.
` Yt provide its service to almost 70% of the nation.
ðY Y

 stintroduced in Japan in
0
 Just in time control system involves the
purchase of materials in such a way that
delivery of purchased material is assured
just before their use or demand
 The philosophy of JYT control system
implies that the firm should maintain the
min. or 0 level of inventory and rely on
suppliers to provide the material just in
time to meet the requirements.
°  ðY
` Vaintain good relations with suppliers so as to
enable purchaser of right quantity of materials at
right time.
` Ynvolves frequent production because of smaller
batch.
` Yt requires reduction in set up time as well as
processing time
` Vajor focus of JYT approach is to purchase or
produce in response to need rather than as the
plans and forecasts.

 ðY
` Vinimum Zero inventory and its
associated cost
` Elimination of non value added activities
and all waste
` Vin. Batch/ Lot size
` Zero Breakdown and continuos flow of
production
` Ensure timely delivery
-  ðY
` The right quantity of materials are
purchased or produced at right time
` Ynvestment in inventory is reduced
` Waste are eliminated
` Carrying or Holding Cost is also reduced
` Reduction in cost of quality

 Y

` EOQ is the size of the lot to be purchased
which is economically viable.
` Quantity purchased should neither be
small nor be big because costs of buying
carrying materials are very high.
` Generally, inventory is the point at which
inventory carrying cost is equal to the
order cost
` Ynventory is held in order to avoid
nuisance.
` Yn determining EOQ it is assumed that cost of
managing inventory is made up of solely 2 parts
i.e. ordering cost and carrying costs.
` ORDERYNG COST:- cost which is associated
with the purchasing or ordering of materials.
` CARRYYNG COST:- these are the cost for
holding the inventories and it will not incurred if
inventories are not carried.
` We can calculate by using the formula
EOQ = under root of 2AS/Y
 ðY  
ëVcDonald's doesn't begin to cook its orders until a
customer has placed a specific order.
ëEarlier VcDonald's would pre-cook a batch of
hamburgers and let them sit under heat lamps. They
would keep them for as long as possible and
eventually discard what couldn't be sold. The only
way to get a fresh hamburger under the old system
was to make a special order. But with changes in
Technology and coming of Toasters this problem was
solved
ëVc Donald provide a customer with their order as
fast as possible while having the finished product
sitting in inventory for as short as possible
Ñ    
 
` Ymproved Quality
` Lower Cost

Y   
Higher Quality = roduce food Faster
Otherwise Ordering Cost will be very high
`‰
 
The holding costs for burger parts (beef,
cheese, buns, whatever other garbage they
put on their burgers) are fairly high
because of their spoilage costs.
Beef which is fresh today may spoil in few
days, once cooked its of no future use
then.
Voreover a burger has a life of  min or
less.
The holding costs go from roughly 20% per
week to 00% per hour.
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