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CHAPTER 13 INVENTORY MANAGEMENT (Types of Inventory (Raw Material &…
CHAPTER 13 INVENTORY MANAGEMENT
Inventory
stock / store of goods
Independent demand items: items ready to be sold/ used
NB for busines
operations
customer satisfaction
Typically: 30% current assets + 90% working capital = inventory
Types of Inventory
Raw Material & Purchased parts
Work-In-Progress (WIP)
Finished Goods
Tools & Suplies
Maintainance & Repairs (MRO)
Goods-in-transit( warehouses/customers) (pipeline inventory)
Objectives of Inventory Control
Level of Customer Service
correct goods available
correct quantity
right place
right time
Costs of Ordering / Carrying Costs
measures of performance
customer satisfaction
quantity of backorder
customer complaints
inventory turnover
Operations Stategy
improved inventory processes = significant cost reduction & customer satisfaction benefits
Ares: Lead to improvement
record keeping: records & data = accurate + up-to-date
variation reduction: lead times and forcasting
lean operations
supply chain management