Write a note on S-OS Analysis

S-OS Analysis: Criterion. time Dyed – seasonality of goods and their procurement during those periods.

The letter S stands for seasonal, and the letters OS stand for off seasonal. SOS analysis deals with the availability or purchase of items during season, or during Off-season. Items which are required to be purchased are normally identified as follows:

a)      Specific seasonal items which are available only for a limited period of time. For example agricultural products like raw mangoes, certain raw materials for cigarette and paper industries etc. Since such items are available only for a limited period of time, they are procured and stored to last till the next season.

b)      Many items are seasonal but they are normally available throughout the year. However, the purchase price of these items is generally lower during the harvest time. Because of this, the company has to predetermine the quantity of these items to be purchased. In other words, the company has to compare the cost savings accrued due to purchase of the items when the price is lower against the inventory carrying costs for the remaining part of the year.

c)      Non-seasonal items pertain to those items, which a company requires to procure when they are not in season. The reason for this may be that the company found it very expensive and non-profitable to purchase and stock these items in bulk when they were available during the season.