09 Inventory

09 Inventory - Inventory Management What is Inventory?...

Info iconThis preview shows pages 1–10. Sign up to view the full content.

View Full Document Right Arrow Icon
Inventory Management
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Stock of materials Stored capacity Examples © 1995 Corel Corp. © 1984-1994 T/Maker Co. © 1984-1994 T/Maker Co. © 1995 Corel Corp. What is Inventory? What is Inventory?
Background image of page 2
The Functions of The Functions of Inventory Inventory To ”decouple” or separate various parts of the production process To provide a stock of goods that will provide a “selection” for customers To take advantage of quantity discounts To hedge against inflation and upward price changes
Background image of page 3

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Types of Inventory Types of Inventory Raw material Work-in-progress Maintenance/repair/operating supply Finished goods
Background image of page 4
Divides on-hand inventory into 3 classes A class, B class, C class Basis is usually annual $ volume $ volume = Annual demand x Unit cost Policies based on ABC analysis Develop class A suppliers more Give tighter physical control of A items Forecast A items more carefully ABC Analysis ABC Analysis
Background image of page 5

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
% of Inventory Items Classifying Items as ABC Classifying Items as ABC 0 20 40 60 80 100 0 50 100 % Annual $ Usage A A B B C C Class % $ Vol % Items A 80 15 B 15 30 C 5 55
Background image of page 6
Inventory Costs Inventory Costs Holding costs - associated with holding or “carrying” inventory over time Ordering costs - associated with costs of placing order and receiving goods Setup costs - cost to prepare a machine or process for manufacturing an order
Background image of page 7

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Holding (Carrying) Costs Holding (Carrying) Costs Obsolescence Insurance Extra staffing Interest Pilferage Damage Warehousing Etc.
Background image of page 8
Inventory Holding Costs Inventory Holding Costs (Approximate Ranges)
Background image of page 9

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Image of page 10
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 05/19/2008 for the course MSOM 3101 taught by Professor Levi during the Spring '08 term at Temple.

Page1 / 30

09 Inventory - Inventory Management What is Inventory?...

This preview shows document pages 1 - 10. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online