FARE 3310 Lecture Notes - Lecture 14: Material Requirements Planning, Package Pilferage, Personnel Selection
68 views5 pages
19 Jan 2018
School
Course
Professor
Document Summary
Importance: objective is to strike a balance between inventory investment and customer service, ex. hospital controlling blood supplies, decisions. If physical goods are in question company needs to decide whether to produce them or purchase them: forecast demand. Types of inventory: raw material inventory- purchased but not processed (used to separate suppliers from production- ideal to eliminate suppler all together, work in process- components of raw material that have undergone some change but are not complete. Inventory control models assume demand is either independent or dependent on the demand for other items: ex. Inventory models for independent demand: eoq (basic economic order quantity model, most commonly used control techniques, based on following assumptions. Therefore when they equal each other you can find the optimal order quantity. Q*= optimum number of units per order (eoq) D= annual demand in units for the inventory item. Expected time between orders= t= number of working days per year/ n.