15-10-2010, 11:29 AM
Inventory Management I
Definitions
Inventory-A physical resource that a firm holds in stock with the intent of selling it or transforming it into a more valuable state.
Inventory System- A set of policies and controls that monitors levels of inventory and determines what levels should be maintained, when stock should be replenished, and how large orders should be
Inventory
Def. - A physical resource that a firm holds in stock with the intent of selling it or transforming it into a more valuable state.
Raw Materials
Works-in-Process
Finished Goods
Maintenance, Repair and Operating (MRO)
Expensive Stuff
The average carrying cost of inventory across all mfg.. in the U.S. is 30-35% of its value.
What does that mean?
Savings from reduced inventory result in increased profit.
Zero Inventory?
Reducing amounts of raw materials and purchased parts and subassemblies by having suppliers deliver them directly.
Reducing the amount of works-in process by using just-in-time production.
Reducing the amount of finished goods by shipping to markets as soon as possible.
Inventory Positions in the Supply Chain
Raw
Materials
Works
in
Process
Finished
Goods
Finished
Goods
in Field
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