Chapter 6 Part 1

Chapter 6 Part 1 - Inventory Decision Making Chapter 6(Part...

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1 1 Inventory Decision Making Chapter 6 (Part 1) 2 Chapter 6 Learning Objectives Understand the fundamental differences among approaches to managing inventory. Appreciate the rationale and logic behind the economic order quantity (EOQ) approach to inventory decision making, and be able to solve some problems of a relatively straightforward nature. Understand alternative approaches to managing inventory JIT, MRP, and DRP. Realize how variability in demand and order cycle length affects inventory decision making. Know how inventory will vary as the number of stocking points decreases or increases. Recognize the contemporary interest in and relevance of time-based approaches to inventory management. Make needed adjustments to the basic EOQ approach to respond to several special types of applications.
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2 3 T ime Inventory Level 0 Inventory Level Over Time 4 Continuous Review (Q) System (reorder point system, fixed order quantity system) • determines if it is time to reorder whenever an item is taken from inventory • a fixed quantity is ordered when the inventory is reduced to the reorder point Periodic Review (P) System (periodic reorder system, fixed interval reorder system) • after a fixed period of time , an order is placed to bring inventory position to a desired target level Inventory Control Systems
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This note was uploaded on 04/11/2011 for the course WCOB 2023 taught by Professor Billthompson during the Spring '07 term at Arkansas.

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Chapter 6 Part 1 - Inventory Decision Making Chapter 6(Part...

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