Management and Organizational Studies 3330A/B Lecture Notes - Lecture 12: Economic Production Quantity, Stockout, Uptodate

• School: Western University
• Department: Management and Organizational Studies
• Course: Management and Organizational Studies 3330A/B
• Professor: Oneil

Document Summary

Components are parts or subassemblies used in building the final product. Distribution inventory consists of finished goods and spare parts at various points in the distribution system for example, stored in warehouses or in transit between warehouses and consumers. Maintenance, repair, and operational (mro) inventory are supplies that are used in manufacturing but do not become part of the finished product. How companies use their inventory: companies build anticipation inventory to maintain level production throughout the year. (seasonal requirements, fluctuation inventory or safety stock. Fluctuation inventory or safety stock is also called buffer stock or reserve stock: lot-size inventory or cycle stock results when a company buys or produces more than is immediately needed. The extra units of lot-size inventory are carried in inventory and depleted as customers place orders: transportation or pipeline inventory is in transit between the manufacturing plant and the distribution warehouse.