SCM 303 Lecture 10: Lecture 10 Notes
Document Summary
Periodic review (p models: inventory is only counted at set review periods, no r (reorder is driven by fixed time period, not my inventory level, commonly used when: Vendors make routine visits to refill their products. Buyers combine orders for several products from the same vendor or distributer. Orders coincide with inventory counts or vice versa. Items are inventory or slow moving: order number is different every time (based on your count) Uncertainty in a p model: reorder always happens at the same time, great uncertainty means greater safety stock, greater safety stock means greater order quantity. Although the goal is typically 100%, aggressive rule of thumb is: 99. 8% for a items, 99% for b items, 95% for c items. Annual physical inventory (api: a physical inventory-counting technique which inventory is counted once per year, a full inventory or all items, companies all used to use this system but it is notoriously inaccurate:
