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Related Flashcards
Related Topics
Cards In This Set
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Inventory
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Stocks/items used to support production (raw materials and WIP items), supporting activities (maintenance, repair, and operating supplies) and custo service (finished goods and spare parts)
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Inventory Types
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Cycle Stock
Safety Stock Anticipation Inventory Hedge Inventory Transportation Inventory Smoothing Inventory |
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Cycle Stock
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Components/products that are received in bulk by a downstream partner, gradually used up, then replenished in bulk by an upstream partner
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Safety Stock
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Extra inv that a company holds up to protect itself against uncertainties in either demand or replenishment time
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Anticipation Inventory
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Inv that's held in anticipation of custo demand
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Hedge Inventory
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Form of inv buildup to buffer against some event that may not happen
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Transportation Inventory
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Inv that is moving from one link in the supply chain to another
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Smoothing Inventory doa
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Inv that's used to smooth out differences btwn upstream production levels and downstream demand
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Inventory Drivers-Business conditions that force companies to hold inventory
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Uncertainty in supply/demand-Safety stock, hedge inv
Mismatch btwn a downstream partner's demand/most efficient production/shipment volumes for an upstream partner-Cycle Stock Mismatch btwn downstream demand levels & upsteam product capacity - Smoothing Inv Mismatch btwn timing of custo demand & supply chain lead times-Anticipation & Trans Inv |
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Independent Demand Inventory
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Inventory items whose demand levels are beyond a company's complete control
Ex: kitchen table - need 500 tables five weeks from now |
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Dependent Demand Inventory
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Inv items whose demand levels are tied directly to a company's planned production of another item
Ex: kitchen table legs - need 4/table or 2000 legs |
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Periodic Review System
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Inv system that's used to manage independent demand inv where the inv level for an item is checked at regular intervals/restocked to some predetermined level
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Continuous Review System
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Inv system used to manage independent demand inv where the inv level for an item is constantly monitored and when the reorder point is reached, and order is released
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Service Level
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Term used to indicate the amount of demand to be met under conditions of demand and supply uncertainty
-Assumes that the demand during the reorder period and the order lead time is normally distributed |
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Economic Order Quantity (EOQ)
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The order quantity that minimizes annual holding and ordering costs for an item
Holding Costs: Cost to hold a single unit in inv for a year Ordering Costs: Cost of placing an order regardless of the order quantity |
