- •What are two inventory classification systems? How do these differ? What is the purpose of such systems? How is each analysis done?
- •What is the 80-20 rule? How is it stated? What causes this to occur when looking at products?
- •What are the various costs associated with inventory? Which are largest? How are they expressed?
- •Ordering Cost
- •Carrying Cost (Holding costs) – the largest!
- •Inventory Storage Cost
- •Cost of Capital
- •4. What are reasons for holding physical supply inventory? What are reasons for holding physical distribution inventory?
- •Market penetration
- •Transportation and Physical Barriers
- •Production lead times
- •Avoid Certain Costs
- •6. What is "just-in-time" inventory management? What are the characteristics? When does it work best? How does it compare to the American system? Problems?
- •7. What are the functional types of inventory we find in a logistical system?
- •8. Trade-off Analysis: Service-Level vs. Cost
- •What is the objective of inventory management and control?
- •Inventory Management provides:
- •Meet Demand
- •Control Costs
- •Identify Opportunities
- •4 Categories of an Inventory Management Tool
- •Logistics Interfaces with Operations
- •Interface activities:
- •Explain the value-added role of logistics
- •Costs Are Significant
- •Logistics Customer Service Expectations Are Increasing
- •Supply and Distribution Lines Are Lengthening with Greater Complexity
- •Logistics/sc Is Important to Strategy
- •Logistics/sc Adds Significant Customer Value
- •12. What are the six major steps that are recommended for a logistics network design process?
- •13. Describe the four main scenarios which occur in the event of a stockout?
- •14. Explain the productivity objective to be achieved through warehouse layout and design?
- •Describe the role of transportation in logistics?
- •Creating Economic Utility
- •Market Area Decision
- •Purchasing Decisions
- •Location Decisions
- •Pricing Decisions
- •Transportation's Place in the Economy
- •Geographic specialization
- •Large-Scale Production
- •Describe some of the dimensions upon which supply chain relationships may differ?
- •17. What are the possible reasons for a company to outsource its logistics? What does this trend mean for today’s businesses?
- •18. What is the role and functions of supply chain intermediaries?
- •20. What are the reasons for logistics providers to improve and expand their businesses? In what way logistics providers of different levels differ?
- •21. How to identify what level of customer service should be offered? (consider tradeoffs)
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What is the objective of inventory management and control?
The main objective is to set inventory levels at the minimum possible while still to be able to meet an order. Effective management of inventory can reduce the length of time money is tied up.
INVENTORY MANAGEMENT must tie together the following objectives, to ensure that there is continuity between functions:
• Company’s Strategic Goals
• Sales Forecasting
• Sales & Operations Planning
• Production & Materials Requirement Planning.
Inventory Management system provides information to efficiently manage the flow of materials, effectively utilize people and equipment, coordinate internal activities and communicate with customers. Inventory Management does not make decisions or manage operations; they provide the information to managers who make more accurate and timely decisions to manage their operations.
Inventory Management provides:
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Up-to-date information about data processing resources..
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Financial records specific to a single component, or groups of components.
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Component Status Indicators to identify a component as Active, Moved, Donated, or Terminated.
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Component Criticality definition (1-5, with 1 being most critical).
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Service records for all components in the inventory.
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Reports that can be generated from the Inventory and Asset Management Systems.
The objectives of Inventory Management are:
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To identify and track all data processing assets in an Inventory System Depository.
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To define the process by which assets are identified and maintained in the Inventory System.
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To provide Inventory System access to all necessary personnel.
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To provide a full range of reports that will satisfy informational requirements.
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To document the Inventory Management System within the Standards and Procedures Manual.
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To provide training to personnel responsible for supporting the Inventory Management System.
The most important objective of inventory control is to determine and maintain an optimum level of investment in the inventory. Most companies have now successfully installed one or the other system of inventory planning and control. Other objectives or inventory control:
Meet Demand
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Effective inventory control ensures that products demanded by customers are available for sale when the customer is ready to purchase. This function requires careful coordination with the marketing efforts of the business to make sure that adequate stock is on hand during sales promotions and for gathering sales data over time to anticipate seasonal demand.
Control Costs
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Inventory is a cost that must be carefully managed. Product turnover is another important consideration. Inventory items that sell quickly will require more warehouse space and a larger inventory to ensure availability. Those products that sell infrequently or make up a small part of the company's profit should be stocked at a lower lever.
Ideally, inventory levels should be maintained at the minimum level possible while still being able to meet every order.