Material Theory along with format and Labour Basics along with formulas .pptx

Material Control and description of Methods of material issues along with Labour Basics and Methods of Wage Payment

1. Material and Labour Ms.S.V.Mohana Sujana Asst.Professor SRM Institute of Science and Technology

2. Definition “The regulation of the functions of an organisation relating to the procurement, storage and usage of materials in such a way as to maintain an even flow of production without excessive investment in material stock”

3. Objectives Ensuring supply of adequate quantity of materials Optimum investment in materials Favourable terms of purchase Control of wastage Control of obsolescence and spoilage Proper reporting to management Prevention of misappropriation of materials Proper control system for settlement of invoices

4. Economic Ordering Quantity (EOQ) Economic ordering quantity aims at minimising both carrying cost and cost of ordering. EOQ = √ 2AB/ CS

5. Stock Levels Reorder Level = Maximum Consumption * Maximum Re order Period Minimum Level = Reorder level – (Normal Consumption * Normal Reorder Period) Maximum Level = Reorder Level + Reorder Quantity - (Minimum Consumption * Minimum Reorder Period ) Average Level = Minimum Level + ½ of reoder quantity Danger Level = Average Consumption * Maximum reorder period for emergency purchases

6. Methods of Pricing Issues Cost Price Methods First In and First Out (FIFO) Last In and Last Out (LIFO) Specific Price Base Stock Highest inn First Out (HIFO)

7. Methods of Pricing Issues Average Price Methods Simple Average Weighted Average Periodic Simple Average Periodic Weighted Average Moving Simple Average Moving Weighted Average

8. Methods of Pricing Issues Notional Price Methods Standard Price Inflated Price Re use Price Replacement Price

9. Format for Stores Ledger Date Part Receipts Issue Balance Qty Rate AMT Qty Rate AMT Qty Rate AMT

10. Inventory Control Inventory control is a system which ensures the maintenance of required quantity of inventories of the required quality at the required time with minimum amount of investment.

11. Bin card Store Keeper : Bin Card is maintained by a store keeper storing of materials Bin card : Each bin is attached with bin card Entries : Bin card consists of receipt, issue and balance of quantity in the bin Update of Balance: Entries are made after each receipt and issue and balance is updated after every entry.

12. Perpetual Inventory system ICMA defines “Perpetual inventory is a system of records maintained by the control department which reflects the physical movement of stocks and their correct balances”

13. Labour Turnover Labour turnover may be defined as change in labour force i.e., percentage change in labour force during a specific period . High labour turnover indicates labour is not stabilised very low labour turnover indicates in efficient workers are being retained in firm

14. Methods of Labour Turnover Separation Method = No.of employees left during the period / Average No of employees during the period * 100 Replacement Method = No.of employees replaced during a period / Average No of employees during the period * 100 Flux Method = No. of employees left + No.of employees replaced / Average No of employees during a period * 100 Additions Method = No. of additions during a period / Average No of employees during a period * 100

15. Idle Time Idle time is un productive time. Generally, alternative time should agree with job time. Time required for walking from factory gate to the department, time lost in waiting for materials, tools, instructions, power failure, break down of machinery is time wasted and termed as idel time Types : Normal Idle time, Abnormal Idle time

16. Over time Employees are expected to work during a fixed scheduled hours, if they work beyond these hours, the excess hours are called as overtime hours. The work beyond the normal hours is to be paid at double the normal rates, which is called as overtime premium.

17. Formulas Time wages = Hours worked * Rate Per hour Piece Wages = No. of Pieces * Rate per Piece Piece Rate = Hourly Rate / Production Per hour Halsey Plan = T * R + 50/100 (S – T) * R Rowan Plan = T * R + S – T/ S * T* R Halsey Premium Plan = T * R + 50/100 (S – T) * R + DA Rowan Premium Plan = T * R + S – T/ S * T* R + DA

18. Thank You