Location via proxy:   [ UP ]  
[Report a bug]   [Manage cookies]                
Scribd Logo
Upload

Welcome to Scribd!

  • 11 views

    Chapter 13 GuongRellama 2pm

    Uploaded by

    guonggabriel666
    This document provides an overview of inventory management concepts including: elements of inventory control systems like economic order quantity models, reorder point methods, two-bin systems, order cycling, and ABC classification. It describes the purpose of inventory management in meeting demand while minimizing costs like carrying and ordering costs. Different types of inventory are defined including raw materials, work-in-process, and finished goods.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd

    Chapter 13 GuongRellama 2pm

    Uploaded by

    guonggabriel666
    11 views16 pages
    This document provides an overview of inventory management concepts including: elements of inventory control systems like economic order quantity models, reorder point methods, two-bin systems, order cycling, and ABC classification. It describes the purpose of inventory management in meeting demand while minimizing costs like carrying and ordering costs. Different types of inventory are defined including raw materials, work-in-process, and finished goods.

    Copyright

    © © All Rights Reserved

    Available Formats

    PPTX, PDF, TXT or read online from Scribd

    Did you find this document useful?

    Is this content inappropriate?

    This document provides an overview of inventory management concepts including: elements of inventory control systems like economic order quantity models, reorder point methods, two-bin systems, order cycling, and ABC classification. It describes the purpose of inventory management in meeting demand while minimizing costs like carrying and ordering costs. Different types of inventory are defined including raw materials, work-in-process, and finished goods.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    11 views16 pages

    Chapter 13 GuongRellama 2pm

    Uploaded by

    guonggabriel666
    This document provides an overview of inventory management concepts including: elements of inventory control systems like economic order quantity models, reorder point methods, two-bin systems, order cycling, and ABC classification. It describes the purpose of inventory management in meeting demand while minimizing costs like carrying and ordering costs. Different types of inventory are defined including raw materials, work-in-process, and finished goods.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    You are on page 1of 16

    INVENTORY MANAGEMENT

    CHAPTER 13

    REPORTERS: RELLAMA & GUONG


    LECTURE OUTLINE:
    • Elements of Inventory
    Management
    • Inventory Control Systems
    • Economic Order Quantity
    Models
    • Reorder Point, min-max
    method,
    • Two-bin system, order
    cycling method and
    • ABC Classification
    Stock of items kept
    to meet future
    What Is demand

    Inventory? Purpose of
    inventory
    management
    • how many units to order
    • when to order
    Inventory and Bullwhip effect

    Supply Chain • demand information is distorted as it moves


    awayfrom the end from the end-use customer
    • higher safety stock inventories to are stored to

    Management
    compensate

    Seasonal or cyclical demand

    Inventory provides independence from


    vendors

    Take advantage of price discounts

    Inventory provides independence between


    stages and avoids work stoppages
    Inventory and Customers usually
    perceive quality
    Quality service as availability
    Management in the of goods they want when
    they want them
    Supply Chain
    Inventory must be
    sufficient to provide
    high-quality customer
    service in QM
    Types of Inventory

    Raw materials Purchased parts and Work-in-process Items being Tools and equipment
    supplies (partially transported
    completed) products
    (WIP)
    Two Forms of Demand
    • Dependent
    Demand for items used to produce final products

    (Tires stored at a Goodyear plant are an example


    of a dependent demand item)

    • Independent
    Demand for items used by external customers

    (Cars, appliances, computers, and houses are


    examples of independent demand inventory
    Inventory Costs
    • Carrying cost
    - cost of holding an item in
    inventory

    • Ordering cost
    - cost of replenishing inventory

    • Shortage cost
    - temporary or permanent loss of
    sales when demand cannot be met
    Inventory Control
    Systems
    • Continuous system (fixed-order-
    quantity)
    - constant amount ordered when
    inventory declines to predetermined
    level

    • Periodic system (fixed Periodic


    system (fixed-time-period)
    - order placed for variable amount
    after fixed passage of time
    Economic Order
    Quantity
    (EOQ) Models

    • The economic order quantity (EOQ)


    refers to the ideal order quantity a
    company should purchase in order to
    minimize its inventory costs.
    Reorder Point

    • A reorder point is the


    level of inventory at which a business
    should place a new order or run the
    Reorder point = (daily sales velocity) × (lead time
    risk that stock will drop below a
    in days) + safety stock
    comfortable level, or even down to zero
    — leaving customers unhappy and orders
    unfulfilled. Usually, ROP refers to
    buying inventory to replenish stock.
    Min-Max Method

    • The Min/Max inventory method


    is a reordering strategy
    that sets a trigger to
    reorder when the minimum
    value is reached. Then it
    orders the necessary to
    reach the maximum, or the
    new stock level following
    the order.
    Two-bin system

    When items in the first bin


    have been depleted, an order
    is placed to refill or
    replace them. The second bin
    is then supposed to have
    enough items to last until
    the order for the first bin
    arrives. In short, the first
    bin has a minimum of working
    stock, and the second bin
    keeps reserve stock or
    remaining material.
    Order Cycling Method

    • This method involves taking


    an inventory at
    predetermined intervals,
    such as every 30, 60, or 90
    days and then placing orders
    to ensure there is
    sufficient stock until the
    next inventory is taken.
    This approach is more apt to
    work for companies with
    limited inventory as it’s a
    time-intensive approach for
    companies with larger
    inventories.
    ABC Classification
    • ABC analysis also referred
    to as ABC Classification, is
    a vital part of
    Inventory Management. It
    allows business owners to
    distinguish the products in
    their stock and focus on
    managing them based on their
    worth. The main objective of
    ABC analysis is to make
    maximum out of minimum
    investment without wasting
    any resources or inventory.
    REFERENCE:

    (OPERATION MANAGEMENT-6TH EDITION BY ROBERTA RUSSELL & BERNARD W. TAYLOR. III)

    https://www.netsuite.com/portal/resource/articles/inventory-management/reorder-point-rop.shtml#:~:text
    =A%20reorder%20point%20is%20the,buying%20inventory%20to%20replenish%20stock
    .

    https://supplybrain.ai/en/min-max-inventory-method-advantages-and-disadvantages/#:~:text=The%20M
    in%2FMax%20inventory%20method,economic%20order%20quantity%20(EOQ)
    .

    https://www.oreilly.com/library/view/regression-analysis-with/9781788627306/6bb0d820-6200-4bfe-aa9
    1-e7b7ffa2a9c1.xhtml

    https://www.investopedia.com/terms/t/two-bin-inventory-control.asp

    https://www.optiproerp.com/blog/right-method-for-inventory-control/#:~:text=Order%2DCycling%20Syst
    em,the%20next%20inventory%20is%20taken
    .

    https://www.deskera.com/blog/abc-analysis/#:~:text=Key%20Takeaways%3A-,ABC%20analysis%20is
    %20an%20inventory%20classification%20strategy%20that%20categorizes%20the,indicates%20the%2
    0least%20essential%20inventory
    .

    You might also like