Page 22 - MRT 1-2

(a) ABC Analysis
(b) VED Analysis
(c) FSN Analysis
(d) Variety Reduction

(a) ABC analysis: This is accost based analysis, the Items are classified according to their
cost. High value Items are grouped in A category, medium value Items are groups in B
category and low value Items are grouped in C- category. The classification is as under:-

Category % of total % of total

number of value of

items
stocked all items
stocked
‘A’ 5% 70%

‘B’ 15% 20%
‘C’ 80% 10%
Q 35. Surplus Stores:
The stores which have not been issued for long time only can be considered Surplus to the
requirements of Railways. Even amongst such items there may be some items which could
be utilized in the near future. Purely temporary excesses over immediate or estimated
requirements are not really surpluses so long as they can be issued over a comparatively
short period of time. Surplus stores could be due to the following reasons:
i. Stock which have not been issued for a long time.
ii. Stock not required by Railways due to change in design of plants, equipments and Rolling
stock
iii. Introduction of new Standard and Design
iv. Spares become obsolete due to scrapping the main machinery such as Rolling Stock and
plants
v. Accumulation of non standard items
vi. Materials no longer required by Railways
An essential prerequisite condition to declare any items of stores as Surplus stock on
Railway is that such items have not been issued for Railway consumption for a period of two
years. Such Surplus stock should be classified under two heads viz.,
i. Movable surplus: Movable surplus stores comprise items of stores which have not been
issued for a period of 24 months and it is anticipated that the item will be issued in the
near future. Such items should be marked in the price list
ii. Dead surplus: Dead surplus stores comprise items of stores which have not been issued
for 24 months and which is considered not likely to be utilized on any Railway within
next two years. No item may however be classified as Dead Surplus unless it has been
duly inspected by a Survey Committee and declared as such. Such items should be
marked in the Price List.
Disposal of Surplus Stock: The Stores department of every Railway is equipped with
Surplus Stock Section who deal effectively with the disposal of Surplus Stock either by issue
or transfer to other Railways or by sale. For issue the consuming departments should be
asked whether the item could be utilized in the next two years or by converting into another
standard item or against another standard item. For transfer, other Railways and other