Inventory Management
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Inventory Management
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25 Questions

1. The stock of materials on hand at a given time and the unutilized assets waiting for sale or use

2. Materials are used by manufacturing and fill a second pool of work in process - this pool must be managed in relation to the capacity of the facility

3. 1) stock of material on hand at a given time (tangible assets that can be seen - measured - and counted) 2) utilized assets waiting for sale of use

4. One firms finished goods may be another firms supplies or raw materials

5. Units put into inventory - can be classified by: size - pattern - lead time (time between order and addition to inventory - constant vs variable)

6. The cost for the item as it is laced in inventory - unit purchase cost (if obtained externally and includes delivery and transportation costs) - unit production cost (if made in house and includes labor - material and overhead costs)

7. Each pool requires synchronization of the rate of flow into and from it - no pool can be controlled without respect to the others - problems in one pool will effect all others - raises question of how much to order at any given time and when to pl

8. Often short on cash because what little they have they devote to growth

9. 1) minimize inventory investment 2) maximize customer service 3) assure efficient plant operation

10. Supplies - raw materials - in-processed goods - finished goods

11. Involves controlling the flow of materials into and out of a system - a big timing problem

12. Includes cost of obsolescence (equal to the original cost-salavage cost) - damage cost - and shrinkage (theft) cost

13. Time factor - discontinuity factor - uncertainty factor - economy factor

14. Working stock - anticipation stock - safety stock - pipeline stock - decoupling stock - psychic stock

15. Internal vs external

16. Includes associated insurance cost (ex insurance for fire and theft) and associated taxes ( can vary substantially from location to location - as much as 0% to 20% of value of goods held in inventory)

17. Purchase - oder cost or set up cost - stock out cost - and inventory holding costs (aka inventory carrying costs)

18. As you move up in the supply chain...

19. Allows freedom of operation for members of the supply chain; allows the treatment of various dependent operations (ex: retailing - warehousing - manufacturing - and purchasing) in an independent and economical manor

20. Supplies - raw materials - in process goods - and finished goods

21. 1) difficulties in synchronizing supply and demand (supply and demand often differ in the rates at which they provide and require stock) 2) material-related operations take time (goods cannot be produced the instant demand occurs)

22. Demands - replenishments - constraints - and costs

23. Repetiveness - source of supply - type of demand - type of lead time - type of inventory

24. Items purchased to be USED in the production process; they will be modified or transformed into the final product; isolate the supplier and the user

25. Low unit cost - high inventory turnover - consistency of quality - favorable supplier relations - continuity of supply - these goals of inventory management are in many ways in direct conflict

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