CS Executive Costing - Material Lecture 1 Part 2 By Dani Ki Costing (DKC)

Lecture 1 Part 1                                                   Lecture 1 Part 3

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(ii) THE TWO-BIN SYSTEM

The basic procedure used under this system is that for each item of stock, two piles, bundles, or bins aremaintained. The first bin stocks that quantity of material which is sufficient to meet its usage during the periodthat elapses between receipt of an order and the placing of the next order. The second bin contains thesafety stock and also the normal amount used from order to delivery date. The moment stock contained inthe first bin is exhausted and the second bin is tapped, a requisition for new supply is prepared andsubmitted to the purchasing department. Since no bin-tag (quantity record of materials) card is maintained,there is absence of perpetual material record under this bin.

CS Exec. Costing - Material Lec. 1 Part 2 By Dani Ki Costing (DKC)

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