M02 BuyIt Fall2010 Student

M02 BuyIt Fall2010 Student - Module02 01 BUYIT:Inventory,...

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Module 02 BUY IT: Inventory,  Purchasing, EOQ,  Forecasting 01
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Key Terms Defined 02 Independent Demand Item  – Items for which demand is influenced by market  conditions.  Demand is not related to demand for other items in stock or  produced. Dependent Demand Item  – Items that are required as components or inputs to  other products or services. Lead Time  -  Time elapsed between customer placing order and order being  received by customer.  (Click purchase – arrive time to my house. 1 day, 1 hour, 1  month, etc.) Lot Size  – Typically refers to the order size (order size you want to use over and  over again (50 today we want 75 tomorrow, etc. supplier hates you for that, no  predictability. VS 400wk each week for the entire year. Much better with  consistency, makes it cheaper and easier to manage.) SKU – Stock Keeping Unit.  Unique identifying number used to track each unique  product customers can purchase. (every item has a different sku)
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Module 02 Part 1: Inventory 03
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Inventory:  Basics 04 Inventory is your insurance against risk at every stage  of the supply chain. Inventory is  “IT”-  Remember Buy IT, Make IT, Move IT,  Sell IT, Service IT ?  Relate inventory types to supply  chain stages. Stock of any ITEM or RESOURCE used in an  organization.  Not just what you sell.  Also includes what  you need to run the business on a day-to-day business. Types of Inventory: Raw Materials/Components, Work-in-Process, Finished  Goods Spare and/or replacement parts Capital Equipment & MRO (Maintenance, repair 
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Inventory  Considerations 05 Storage  - Space, Heat/Cool Environment, Energy  Requirements, Labor, Handling, Buy/Lease, Cost Transport  - Vehicle, Cool/Heat, Fuel, Labor, Packaging,  Cost Shrinkage  - Pilferage, Security, Lost Items,  Damaged, Obsolescence Other Inventory Needs  - What else do we hold in  inventory?   Do we have enough room for everything we  typically carry? Money  - Cash, Financing Terms, Taxes, Insurance Legal Considerations  - Licenses, Certifications, Other  Laws
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Personal Inventory Items Bottled Water Frozen pizza and strawberries Computers – you don’t buy 6 computers when it’s a good price, obscolescence Automobiles Gasoline – if its low you don’t buy 100 gallons extra, and its against the law Haircuts and Car Washes
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Supply Chain  Risk 06 UNDERSTANDING YOUR RISK LEVEL Who is at risk?  Whose risk is it?
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This note was uploaded on 03/06/2011 for the course SCM 300 taught by Professor D during the Spring '07 term at ASU.

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M02 BuyIt Fall2010 Student - Module02 01 BUYIT:Inventory,...

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