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CHAPTER 4: INVENTORY MANAGEMENT (Five costs (Finance costs: …
CHAPTER 4: INVENTORY MANAGEMENT
Inventory management is the supervision of non-capitalized assets which is inventory and stock items. A component of supply chain management, inventory management supervises the flow of goods from manufacturers to warehouses and from these facilities to point of sale.
Basics in industry inventory management
Identify : Stock keeping Unit
Plan : push and pull
Locations : on site, off site and dropship
Records : paper and PC
Five costs
Finance costs: when capital is invested in inventory, the costs of finance is interest
Management costs is a wide information technology
Human capital which the cost of labor to manage stock for examples moving, handling and counting it.
Procurement costs is the cost of purchasing
Facility costs which holding cost include rental, standing equipment. utilities,
Three service classes
Non-critical is a part of reasonable time-frame but not necessary urgent such as computer, building materials
Scheduled delivery items received
regularly or big ticket items such as furniture that
needs to be assembled prior to delivery
Critical is a part of the needed quickly which is medical or emergency
Strategies
Postponement Logistic
Vendor Managed Inventory