TAILIEUCHUNG - Lecturte Logistics management - Chapter: Inventory management

Lecturte Logistics management - Chapter: Inventory management. At the end of this lecture, students should be able to define inventory, understand the various types of inventory, understand the reasons for keeping inventory, understand the inventory models (EOQ, POQ, QD). | Inventory Management Learning outcomes At the end of this lecture, students should be able to Define inventory Understand the various types of inventory Understand the reasons for keeping inventory Understand the inventory models (EOQ, POQ, QD) Managing Facilitating Goods Factory Wholesaler Distributor Retailer Customer Replenishment order Replenishment order Replenishment order Customer order Production Delay Wholesaler Inventory Shipping Delay Shipping Delay Distributor Inventory Retailer Inventory Item Withdrawn What is inventory? Inventory is the raw materials, component parts, work-in-process, or finished products that are held at a location in the supply chain. Inventory decisions are high-risks and high-impacts from the perspective of logistics operations Inventory management is important to avoid under-stocking or over-stocking. What are the two main issues that need attention to ensure proper management of inventory level? Order Quantity- how much to order (EOQ/lot sizes) Order Points- when to place an order (Reorder point) Types of Inventory Raw material Purchased but not processed Work-in-process Undergone some change but not completed A function of cycle time for a product Maintenance/repair/operating (MRO) Necessary to keep machinery and processes productive Finished goods Completed product awaiting shipment Type of Inventory Type of Organization Supplies Raw In-Process Finished Materials Goods Goods A. Retail systems 1. Sale of goods 2. Sale of services B. Wholesale / Distribution systems C. Manufacturing systems 1. Special project 2. Intermittent process . 3. Continuous process a. Process industries b. Repetitive mfging. * * * * * * * * * * * * * * * The Need for keeping Stock? To cater for both demand and supply As safety / protection (physical protection, against supplier uncertainty and non-forecasted demand) In anticipation of demand Improve customer service To maintain independence of supply chain Unplanned shocks (labor strikes, natural .

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