Flashcards
Inventory Control
Cards in this deck (9)
- 15 Inventory CategoriesBuffer - Compensate for fluctuations in supply and demand.
Cycle - Multiple process stages cannot supply items simultaneously - run process several times to offer full output range.
De-Coupling - Allow 2 processes to proceed at different speeds, independently.
Anticipation - Storage to cope with predictable fluctuations in demand.
Pipeline - Occurs in time that item is shipped and delivered. - 2What are the three major inventory decisions?1. Volume
2. Timing
3. Control - 3What has to be considered for volume?- Find order volume that balances order and storage costs
- Consider EOQ Model
- Find the minimum point on the total cost function
- Differentiate function w.r.t Q, and zero to find the optimum order quantity - 4What is the EOQ Model?Total Ordering Cost = DemandxOrdering Cost/Order Quantity
Total Storage Cost = Order QuantityxStorage Cost/2
Add together to give total inventory cost - 5What should be considered in the timing decision?- Reorder point - Point when more parts are ordered to avoid running out before the next batch arrives.
- Re-order level - Level of inventory at which more items are ordered - calculated to avoid running out. - 6What should be considered in the control decision?- Continuous monitoring allows economic ordering, however it is irregular.
- Periodic approach requires the inventory to be reviewed in fixed time periods, and makes orders accordingly - 7What is 2 bin inventory control?Inventory divided into 2 bins, one containing items for use, and the other uses a safety inventory and ROL. When the first bin is empty, an order is made, and the second bin is used.
- 8What is ABC inventory control?Classes inventory by its usage value. Small proportion of the item range is used most often. (80% of sales from 20% of the range). ABC approach allows managers to concentrate efforts on controlling in demand items of stock.
A- 20% of items with 80% of total usage
B - Medium usage, 30% of items with 10% of total usage
C - Low usage, 50% of items with 10% of total usage
Take great care with A items (EOQ) and less with B and C (2 bin etc) - 9How can you measure an inventory?- Monetary Value
- Stock Cover - how long the items are in the inventory for
- Stock Turn - Number of times inventory is completely depleted over a year at normal rates.
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- Manufacturing Flashcards on Inventory Control, created by fay_johnston on 06/05/2013.
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- fay_johnston
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