Perpetual Review
•Inventory status is reviewed to determine replenishment needs. •Implemented through a reorder point and order quantity. ¨ROP= D x T + SS, where •ROP= reorder...
Logistics Management
-
-
Inventory Cost Consideration
1.Origin purchase consideration 2.Transportation cost. (a)Origin purchase means the buyer is responsible for freight cost and product risk when the product is in transit. (b)Depending...
-
Inventory Management Strategy
Companies can postpone positioning of inventory by maintaining stock at the plants or they may decide to place more products in local distribution centres to...
-
Buffer Uncertainties
Buffer Uncertainties -Safety stock protects against two types of uncertainties: -(a) Demand in excess of forecast during the performance cycle. For instance, customers’ request of...
-
Balancing Supply and Demand
Balancing Supply and Demand -Balancing is concerned with elapsed time between consumption and manufacturing as balancing inventory reconciles supply availability with demand. -Particularly useful in...
-
Decoupling
Decoupling -Provides for increasing operating efficiency within a single manufacturing facility by stockpiling work-in-process inventory between production operations. -Decoupling enables manufacturing and distribution of economic...
-
Geographical Specialization
-It allows for geographical specialization for individual operating units. -The need for geographical specialization arises because various factors of production viz. power, materials, water, labour,...
-
Retail inventory
Retail inventory -Retailer inventory risk is wide but not deep. -The emphasis is more on inventory velocity. -Inventory velocity is measured by inventory turnover. -The...
-
Wholesale inventory
Wholesale inventory -Wholesaler purchases large quantities from manufacturers and sells small quantities to retailers in order to provide retail customers with assorted merchandise from different...
-
Manufacturing inventory
Manufacturing inventory -Manufacturer’s inventory commitment starts with raw material and component parts, including work-in-process, and ends with finished goods. -Manufacturer needs to transfer the finished...
