OPER 2P91 Chapter Notes - Chapter 7: Finished Good, Personnel Selection, Toaster

• School: Brock University
• Department: Operations Management
• Course: OPER 2P91
• Professor: Susan Sproule

Document Summary

Importance of inventory: inventory is one of the most expensive assets of many companies, representing as much as 50% of total invested capital. Objective of inventory: strike a balance between inventory investment and customer service. Types of inventory: raw material inventory: this has been purchased but not processed. Can be used to separate suppliers from the production process and eliminate supplier variability: work-in-process: components of raw material that have undergone some change but are not completed, finished goods: the completed product awaiting the shipment. Finished goods may be inventoried because future customer demands are unknown. Cycle counting: a continuing reconciliation of inventory with inventory records: advantages, eliminates the shutdown and interruption of production necessary for annual physical inventories, eliminates annual inventory adjustments, trained personnel audit the accuracy of inventory, maintains accurate inventory needs. Inventory that is in transit or idles in a warehouse is lost value.