Managing Inventory in the Supply Chain

Managing Inventory in the Supply Chain

1. Sources

   • Procurement
   • Production
   • Transportation
   • Marketing
   • Finance
   • Manufacturing

2. Uncertainty

   • Safety Stocks
   • Time
     • Transportation
     • Work-in-Process

3. Stocks

   • Seasonal
   • Antcipatory

4. Inventory Costs

   • Capital Cost
     • interest or opportunity cost
   • Hurdle rate
   • Weighted Average Cost of Capital
   • Storage Space Cost
     • Inventory Service Cost
       • includes insurance and taxes
       • Inventory Risk Cost
         • Order or Set Up Cost

5. Carrying cost

   • Ordering Cost or Setup Cost
   • Order Cost
   • Setup Costs

6. In-Transit Inventory Carrying Cost

   • cost becomes especially important on global moves
   • storage space cost not relevant to inventory in transit
   • Insurance

7. Pull & Push

   • customer orders to move product through a logistics system
   • anticipation of demand to move products.

8. EOQ Model

   • Total Cost Model
   • Quadrant model
   • The Square-Root Rule

9. JIT

   • zero inventories
   • small, frequent replenishment quantities

10. MRP

    • Master production schedule (MPS)
    • Bill of materials file
    • Inventory status file
    • Outputs and reports

11. Distribution Requirements Planning

    • Forecast of demand for each SKU
    • Recommended replenishment quantity

12. Vendor-Managed Inventory

    • The supplier and its customer agree on which products are to be managed using in the customer’s distribution centers
    • Pull Data

13. ABC

    • A) items are considered to be the most important

14. Bibliogrfia: Supply Chain Management. A Logistics Perspective, ISBN 978-0-538-47918, 9th edition. Authors: Coyle, Langley, Novack, Gibson, Editorial Cengag