Session 5 - Inventory

Session 5 - Inventory - InventoryManagement Session5Chap.12

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Inventory Management Session 5 – Chap. 12 OM 301-002, Operations Management, Spring 2010
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Agenda Major Subjects Purposes, Types, and  Components of Inventory Inventory Control Decisions Inventory Costs Inventory System Classifications Independent vs. Dependent  Demand Deterministic vs. Stochastic  Systems Inventory Level vs. Position EOQ Model Safety Stock Model Effective Inventory Management Learning Objectives Understand the purposes of  maintaining inventory Identify inventory control  decisions and inventory costs See various classifications and  concepts of inventory systems Learn key terminology used in  inventory management Use EOQ model to determine  order quantity and reorder point Use probabilistic model to set  safety stock and reorder point Know how to effectively manage  an inventory system
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Purposes of Inventory To take advantage of  economies of scale To take advantage of lower  price/cost structures To protect against demand  and supply uncertainties To support a strategic  production plan To maintain production  system flexibility To support marketing  activities Types of Inventory Finished goods Raw materials Work-in-process (WIP) Maintenance/repair/operating 
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Session 5 - Inventory - InventoryManagement Session5Chap.12

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