International Journal of Scientific and Research Publications, Volume 3, Issue 3, March 2013 1 ISSN 2250-3153 www.ijsrp.org Analysis of Inventory Control Techniques; A Comparative Study Tom Jose V*, Akhilesh Jayakumar*, Sijo M T* *SCMS School of Engineering and Technology, Kochi Abstract- Every organization needs inventory for smooth running of its activities. It serves as a link between production and distribution processes. The investment in inventories constitutes the most significant part of current assets and working capital in most of the undertakings. Thus, it is very essential to have proper control and management of inventories. The purpose of inventory management is to ensure availability of materials in sufficient quantity as and when required and also to minimize investment in inventories. So, in order to understand the nature of inventory management of the organization, In this paper we analyzing different inventory control techniques for efficient inventory management system. Index Terms- Assets, Distribution, Inventory, Production, Working capital I. INTRODUCTION o inventory control is vitally important to almost every type of business, whether product or service oriented. Inventory control touches almost every facets if operations. A proper balance must be struck to maintain proper inventory with the minimum financial impact on the customer. Inventory control is the activities that maintain stock keeping items at desired levels. In manufacturing since the focus is on physical product, inventory control focus on material control. “Inventory” means physical stock of goods, which is kept in hands for smooth and efficient running of future affairs of an organization at the minimum cost of funds blocked in inventories. The fundamental reason for carrying inventory is that it is physically impossible and economically impractical for each stock item to arrive exactly where it is needed, exactly when it is needed. Inventory management is the integrated functioning of an organization dealing with supply of materials and allied activities in order to achieve the maximum co-ordination and optimum expenditure on materials. Inventory control is the most important function of inventory management and it forms the nerve center in any inventory management organization. An Inventory Management System is an essential element in an organization. It is comprised of a series of processes, which provide an assessment of the organization’s inventory. For example we are considering the inventories in a company which make washing machines in all these analysis. II. ECONOMIC ORDER QUANTITY Economic Order Quantity is the Inventory management technique for determining optimum order quantity which is the one that minimizes the total of its order and carrying costs. In the given table the EOQ & the no. of orders purchased per year for various components are calculated. The calculated EOQ is compared with the no. of units of each component purchased in the organization. It is found that, there is a variation in the EOQ & no. of unit purchased. It is understood that the company is not following EOQ for purchasing the materials & therefore the inventory management is not satisfactory. There are two major cost associated with inventory. Procurement cost and carrying cost. Annual procurement cost varies with the numbers of orders. This implies that the procurement cost will be high, if the item is procured frequently in small lots. The annual procurement cost is directly proportional to the quantity in stock. The inventory carrying cost decreases, if the quantity ordered per order is small. The two costs are diametrically opposite to each other. The right quantity to be ordered is one that strikes a balance between the two opposition costs. This quantity is referred to as “Economic Order Quantity”(EOQ). S