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Unformatted text preview: Test 3 Review Ch. 12 Inventory MGMT 1) four main types of inventory- raw material inventory: purchased but not processed- work-in-process inventory: includes components or raw materials that have undergone some change but are not completed; exists due to cycle time- maintenance/repair/operating supply (MRO) inventory: devoted to maintenance/repair/operating supplies necessary to keep machinery and processes productive- finished-good inventory: includes completed product waiting shipment 2) functions of inventory- to allow for economic purchase or production; buying in bulk- to decouple the various phases of the manufacturing process; not all equipment and personnel operate at the same rate- to protect against uncertainties in supply or demand- to cover anticipated changes in demand or supply; holidays, future expectations- to provide for transit; time required to ship from one place to another 3) holding costs, ordering/set up cost- holding costs to carry an item in inventory for a length of time, such as, interest, insurance,...
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- Summer '08