MGIS 317 Lecture Notes - Stock Management, Opportunity Cost, Lead Time

• School: University of Calgary
• Department: Management Information Systems
• Course: MGIS 317
• Professor: Ronald Schlenker

Document Summary

Stock (inventory) :materials and goods required to allow for the production and supply of products to the customer. Manufacturing business will hold stocks in three distinct forms: raw materials and components these are held in stock until they are used. During this process there will be work in progress" and for some firms this will be the main form of stocks held. The value of stocks held in this form depends not only on the length of time needed to complete production used: finished goods these are held in stock until sold and despatched to the customer. These stocks can be displayed to potential customers and increase the chances of sales. They are also held to cope with sudden, unpredicted increases in demand so that customers can be satisfied without delay. Without effective stock management several serious problems can arise for firms: There might be insufficient stocks to meet unforeseen changes in demand.