MSOM 306 Lecture Notes - Lecture 9: Personnel Selection, Lead Time, Frito-Lay
Document Summary
Raw material for brewery (i. e. glass, cans, raw ingredients) Frito lay raw materials (potatoes, corn, seasoning, etc. ) Amazon. com started as a virtual retailer-- no inventory, no warehouses, no overhead, just computers taking orders to be filled by others. Items are placed in crates on a conveyor, bar code scanners scan each item. Objective: strike a balance between inventory investment and customer service. One of most expensive assets of many companies representing as much as. Operations managers must balance inventory investment and customer service. Provide selection of goods for anticipated demand and to separate the firm from fluctuations in demand. Decouple or separate various parts of production process. Necessary to keep machinery and processes productive. Crossover point = lowest total cost for inventory (d/q)(s) = (q/2)(h) From the sample, you can find out the total cost and reorder point. Divides inventory into 3 classes based on annual dollar volume.