The X-bar chart is a control chart which tracks the mean or the average of sub-groups of up to 6 different data points.  Although the charts are not as sensitive as the I and MR charts they are very effective and easy to use when looking analyse whether a process is under control or not. The X-bar chart typically is used when monitoring characteristics that can be measured on a continuous basis. 

  The R-Bar chart is another control chart which is used to monitor control of a "range".  The R-Bar control chart tracks the difference between the maximum and minimum values in a subgroup. 

​  An inventory policy outlines the organization's vision, objectives and goals with regards to inventory.  It will also define how the company intends to manage its inventory at all levels of the organization.

  ABC classification or ABC analysis is a technique used in materials management.  The ABC represents the different categories of inventory in your system and indicates the level of control each category requires.  The Apics Dictionary defines the categories of the ABC system as:

1. A = The A group usually represents 10 percent to 20 percent by the number of items and 50 percent to 70 percent by projected dollar volume.
2. B = The B grouping usually represents about 20 percent of the items and about 20 percent of the dollar volume.
3. C = The C grouping usually contains 60 percent to 70 percent of the items and represents about 10 percent to 30 percent of the dollar volume.  

  It is important to note that there is no fixed numbers for each category.  Each organization should customize their classification system based on a pareto analysis.  

Discussion:

1. What benefits can you see in applying tighter or looser controls to inventory management items?

  

  The Sales and Operations or S&OP processes mission is to balance supply and demand at an aggregate level, to align operational planning with financial planning, and to link strategic planning with tactical/operational planning.  It does this through a series of meetings which are designed to guide a group of individuals towards consensus of "ONE" plan.