•Quite similar to numerical system in which 7-digit numerical code assigned to each item.
•The materials are grouped as under:
(a)Primary materials
(b)Over the shelf items purchased
(c)Components according to company’s own design.
(d)Assemblies and subassemblies.
(e) Tools, jigs and fixtures etc.
•Materials are further subdivided according to their class characteristics.
•By establishing differences at various levels, thy are again sub-divided at sill lower levels.
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