9/23/2015
1
Service Operations Management – Fall 2015
Sessions15 & 16: Inventory Management
After going through this lecture, you will be able to,
•
Understand the important concepts associated with
managing service inventories
•
Discuss the concept of Economic Order Quantity (EOQ)
•
Understand the concept of:
•
Continuous review system
•
Periodic review system
•
Discuss the
Newsvendor Problem
for developing the
Single Period Model for Perishable Goods
Learning Objectives
9/23/2015What is Inventory Management?
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•The process of efficiently overseeing theconstant flow of units into and out of anexisting inventory•Involves controlling the transfer in of unitsin order to prevent the inventory frombecoming too high (overstocking), or toolow (stock outs)•Also seeks to control the costs associatedwith the inventory•Two common inventory managementstrategies arejust‐in‐time methodandmaterials requirement planningInventory Flow Process
