Two-Bin Inventory Control

AAA

DEFINITION of 'Two-Bin Inventory Control'

An inventory control system used to monitor the quantity of an item left behind. The two-bin inventory control method is mainly used for small or low value items. For example, when items in the first bin have finished, an order is placed to refill or replace these items. The second bin is supposed to have enough items to last until the placed order arrives. The first bin has a minimum of stock and the second bin keeps reserve stock or remaining material. Bin cards and store ledger cards are used to record the inventory.

INVESTOPEDIA EXPLAINS 'Two-Bin Inventory Control'

This system is used for material control, which is basically the control of materials. This is a cost effective method where the goal is to save money and use it to order more materials. It is used to control overstocking and under-stocking issues and keep track of miss-management of material.


This method is also referred to as kanban, in the United States.



RELATED TERMS
  1. Economies Of Scale

    The cost advantage that arises with increased output of a product. ...
  2. Closed Loop MRP

    A system used for production planning and inventory control, ...
  3. Kanban

    A specific type of inventory control system. The kanban system ...
  4. Diseconomies Of Scale

    An economic concept referring to a situation in which economies ...
  5. Production Efficiency

    1. An economic level at which the economy can no longer produce ...
  6. Unit Cost

    The cost incurred by a company to produce, store and sell one ...
RELATED FAQS
  1. No results found.
Related Articles
  1. Insurance

    Working Capital Works

    A company's efficiency, financial strength and cash-flow health show in its management of working capital.
  2. Fundamental Analysis

    Measuring Company Efficiency

    Three useful indicators for measuring a retail company's efficiency are its inventory turnaround times, its receivables and its collection period.
  3. Investing Basics

    The Working Capital Position

    Learn how to correctly analyze a company's liquidity and beat the average investor.
  4. Fundamental Analysis

    Inventory Valuation For Investors: FIFO And LIFO

    We go over these methods of calculating this component of the balance sheet, and how the choice affects the bottom line.
  5. Investing Basics

    Understanding The Cash Conversion Cycle

    Find out how a simple calculation can help you uncover the most efficient companies.
  6. Investing

    What's a Debit Note?

    A debit note is a document used by a seller to inform a purchaser of a dollar amount owed. As the name indicates, it is a note from the seller that a debit has been made to the purchaser’s account. ...
  7. Professionals

    What does C-Suite Mean?

    C-Suite is a slang term used to describe the highest level senior executives of a corporation. This is the decision-making, power center of a company. These individuals are usually paid well, ...
  8. Investing

    What's a Monopolistic Market?

    A monopolistic market has a significant number of characteristics of a pure monopoly. Though there may be more than one supplier, the market has high prices, suppliers tightly control availability ...
  9. Professionals

    What's Human Capital?

    Human capital is a company asset, but it’s not listed on the balance sheet. Human capital is all of the creative skills and knowledge embodied in the employees of a company -- skills that bring ...
  10. Investing

    What's Capitalization?

    Capitalization has different meanings depending on the context.

You May Also Like

Hot Definitions
  1. Technical Skills

    1. The knowledge and abilities needed to accomplish mathematical, engineering, scientific or computer-related duties, as ...
  2. Prepaid Expense

    A type of asset that arises on a balance sheet as a result of business making payments for goods and services to be received ...
  3. Gordon Growth Model

    A model for determining the intrinsic value of a stock, based on a future series of dividends that grow at a constant rate. ...
  4. Cost Accounting

    A type of accounting process that aims to capture a company's costs of production by assessing the input costs of each step ...
  5. Law Of Supply

    A microeconomic law stating that, all other factors being equal, as the price of a good or service increases, the quantity ...
  6. Investment Grade

    A rating that indicates that a municipal or corporate bond has a relatively low risk of default. Bond rating firms, such ...
Trading Center