61
T
EACHING
S
UGGESTIONS
Teaching Suggestion 6.1:
Importance of Inventory Control.
Inventory control is important to most organizations. This chapter
on inventory control can be introduced to students by a discussion
of the consequences of too much and not enough inventory. The
high cost of carrying too much inventory and the problems of
stockouts, lost customers, and reduced market share as a result of
too little inventory can be introduced at the beginning of this chap
ter. You may want to use a car dealership example. Should the car
dealership stock every model and color? How many types of cars
should be stocked?
Teaching Suggestion 6.2:
Examples of the Functions of
Inventory Control.
The importance of inventory to store resources, take advantage of
quantity discounts, and avoid stockouts is discussed in this chap
ter. Students can be asked to give examples of how each of these
important functions has been or can be used by organizations. An
inclass discussion will help students realize the relevance of in
ventory control.
Teaching Suggestion 6.3:
Importance of Basic
Inventory Assumptions.
The assumptions of the basic EOQ model are important. The sim
ple EOQ formula is a direct result of these assumptions. Students
can be told that these assumptions will be relaxed in more com
plex models and inventory procedures.
Teaching Suggestion 6.4:
Setting Ordering Cost Equal to
Carrying Cost Doesn’t Always Work for More Complex Models.
This chapter determines the formula for the basic economic order
quantity by setting ordering cost equal to carrying cost. Some stu
dents might get the wrong idea that this approach can be used with
all inventory problems. Students should be told that calculus pro
cedures can be used to determine the basic EOQ formulas and are
needed for more complex inventory situations.
Teaching Suggestion 6.5:
Other Ways of Looking at
Inventory Problems.
In this chapter, students are shown how to compute the optimal
number of orders per year and the number of days between orders.
This was done so students can see that there are different ways to
look at the same inventory problem. This is a good place to point
out that there are many ways of solving the same problem. The
problems at the end of the chapter ask students to compute related
inventory quantities, including the optimal number of orders per
month and the optimal number of weeks between orders.
Teaching Suggestion 6.6:
Comparing the Basic EOQ Model with
the EOQ Model without the Instantaneous Receipt Assumption.
This chapter computes EOQ for the case where the instantaneous
receipt assumption is relaxed. A comparison of the traditional
EOQ model and this model can be made. The major difference is
the holding cost, which is reduced compared to the traditional
EOQ formula. This is due to the change in the average inventory
level for this model.
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 Spring '11
 MichaelHanna
 INVENTORY CONTROL MODELS

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