Ch 2 · Material Cost

📘 Core concepts

1. 1EOQ minimizes total inventory cost (ordering + carrying).
2. 2ABC analysis: A = high value low qty, C = low value high qty.
3. 3VED analysis (Vital, Essential, Desirable) for stores.
4. 4Stock levels: Re-order, Min, Max, Average; safety stock for uncertainty.
5. 5Pricing of issues: FIFO, Weighted Average, Standard Cost (LIFO not preferred per AS-2).