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Storage of Materials

The function of storage of materials is performed by the storekeeper. His duties include accepting, identifying, classifying and proper placing of materials. Efficient storage requires consideration of the following points:

Checking of materials

The storekeeper should accept materials only after proper checking. He should verify the materials received with consignment note, inspection report and materials received report. He should send the copy of materials received by him, after verifications to the accounts departments.

A proper system of classification and codification is necessary to prevent mixing of one type of materials with the other. This also helps in increasing efficiency of the factory on account of instant availability of materials and supplies in required quantities.

Bins and racks

The store should be divided into several sections, each meant for one particular type of material. Each item should have suitable container for keeping verities of that particular type of material. Such containers are terms as bins or racks. For example, the store may have a separate section for bolts. This section may keep bolts of different sizes in different bins. To facilitate materials handling and easy location of materials it will be better if floor plans are exhibited at the entrance of each store room exhibiting the location of various sections.

Maximum and minimum levels

In order to avoid over and under investments in materials, the management should decide the maximum quantity of materials to be kept in store. The limits set by the management should be observed by the storekeeper.

Maximum level

The maximum level is the largest quantity of a particular material which should be kept in the store any one time. The fixation of maximum level is necessary to avoid unnecessary blocking up of extra capital in inventories, losses on account of deterioration and obsolescence of materials, extra overheads (rent etc.) and temptations to the thefts. The maximum level of materials should be decided after taking into consideration.

Formula

Maximum level – re-orders level + re-orders quantity – (minimum consumption × minimum re-order period)

Minimum level

The minimum level is the lowest quantitative balance of materials which must be maintained in hand at all times so that the assembly line may not be stopped on account of non availability of materials.

Formula

Minimum level = re-order level – average rate of consumption × average time required to obtain fresh delivery.