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Notes - Ch. 11 - Inventory - 11-10-2008

Notes - Ch. 11 - Inventory - 11-10-2008 - suppliers within...

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1. Inventory has three different stages a. Raw Materials b. Work in Progress c. Finished goods 2. Inventory is one of the most talked about… cost of inventory is 30-35% of total market value in the US 3. Navistar – manufacture medium sized and heavy trucks a. Practice manufacturing inventory b. 99k parts in inventory c. Used to have 20-30 days of inventory d. Practice JIT e. 44% of their inventory is 3-4 days f. 56% of their inventory is 10-15 days 4. Caterpillar a. Practice a Service Parts inventory b. 460,000 different parts in stock from parts they have had over the last 40-50 yrs c. Have about 310,000 of those parts in stock d. In North America about 130,000 parts are ordered per day e. Avg. 11 out of 10,000 orders are backordered. Guarantee parts in 48 hours or its free f. JIT does not work here g. They have a random demand in service parts and therefore cannot do JIT 5. Types of inventory a. Transit Inventory – In transit to shop. = money is tied up… Ways to fight this are FedEx over night or the way the Japanese do it which is have
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Unformatted text preview: suppliers within one day’s drive of the factory. b. Buffer Inventory – not sure how much you may need so you have little extra… Just in Case stock c. Seasonal Inventory – d. De-Coupling Inventory – e. Speculative Inventory - f. Cycle Inventory - g. Mistakes - 6. Inventories are bad only when they DO NOT ADD VALUE… 7. EOQ Model a. Know this equation…. CYCLE = Q/D years 8. Reorder point decision a. ROP = demand during lead time = D x LT 9. MRP Process (Materials Requirement Planning) – recognize that those 4 ladies are end-items and are made of a certain building material a. Let’s get together and decide what we are going to make. b. Planned lead times – know where everything is and when we are going to use it i. Final Assembly, build Bike Frames, Build front… ii. Allow 2 weeks c. Inventory status – finished goods, raw materials, d. Order status – finished order, in progress,...
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Notes - Ch. 11 - Inventory - 11-10-2008 - suppliers within...

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