Note Si Somel Utk Jd Enjin Nyiur Di Kalangan Masyarakat
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INVENTORY MANAGEMENT Definitions Inventory- physical resource that a firm holds in stock. intent of selling it or transforming it into a more valuable state Inventory System- set of policies and controls and monitors levels of inventory Zero Inventory? Reducing amounts ofraw materials and purchased parts and subassemblies by having suppliers deliver them directly. Reducing the amount ofworks-in process by using just- in-time production. Reducing the amount offinished goods by shipping to markets as soon as possible. Reasons for Inventories Improve customer service Economies of purchasing & production Transportation savings Hedge against future Unplanned shocks (labor strikes, natural disasters, surges in demand, etc.) To maintain independence of supply chain Nature of Inventory Quality - inventory can be a “buffer” against poor quality; conversely, low inventory levels may force high quality Speed - location of inventory has gigantic effect on speed Flexibility - location, level of anticipatory inventory both have effects Cost - direct: purchasing, delivery, manufacturing indirect: holding, stockout. HR systems may promote this-3 year postings Functional Roles of Inventory Transit Buffer Seasonal Decoupling Speculative Lot Sizing or Cycle Mistakes How to Measure Inventory Average Aggregate Inventory Value: how much of the company’s total assets are invested in inventory? Weeks of Supply Inventory Turnover (Turns) Reasons Against Inventory Non-value added costs Opportunity cost Complacency Inventory deteriorates, becomes obsolete, lost, stolen, etc. Inventory Costs Independent Demand items are finished products or parts that are shipped as end items to customers. Forecasting plays a critical role Due to uncertainty- extra units must be carried in inventory Dependent Demand items are raw materials, component parts, or subassemblies that are used to produce a finished product. MRP systemsMicro Issues Order Quantity : Economic Order Quantity (EOQ) Q = 2DC o /C h D = annual demand C o = ordering/setup costs C h = cost of holding one unit of inventory Order Timing : Reorder Point (ROP) When inventory is depleted to ROP, order replenishment of quantity EOQROP = D X LT D = Demand rate per period LT = lead time in periods Quantity Discount 1. Write out the total cost equation 2. Solve EOQ at highest price and no discounts 3. If Qmin falls in a range with a lo wer price, recalculate EOQassuming holding cost for that range. Call this Q2 . 4. Evaluate the total cost equation at Q2 at the next highest price break point. OR Use a spreadsheet Periodic Review Method Q-system - each stock item reordered at different times - complex, no economies of scope or common prod./transport runs P-system - inventory levels for multiple stock items reviewed at same time - can be reordered together Classifying Inventory Items : ABC Classification (Pareto Principle) A Items: very tight control, complete and accurate records, frequent review B Items: less tightly controlled, good records, regular review C Items: simplest controls possible, minimal records, large inventories, periodic review and reorder Procurement costs • Order processing • Shipping • Handling • Purchasing cost: c(x)= $100 + $5x • Mfg. cost: c(x)=$1,000 + $10x Carrying costs • Capital (opportunity) costs • Inventory risk costs • Space costs • Inventory service costs Out-of-stock costs • Lost sales cost • Back-order cost
