33:799:301 Lecture 8: 0008-IntrotoSupplyChain-2017-03-07

• School: Rutgers University
• Department: Supply Chain Management
• Course: 33:799:301
• Professor: James King

Document Summary

A key decision in any product-based supply chain is how much inventory to keep on hand. Inventory is often one of the company"s largest assets, so careful management of that asset is an essential business requirement. Management must reduce inventory levels yet meet revenue and customer service targets. Inventory must be secured, tracked and verified (counted) Decouple dependencies in the supply chain (safety stock) Maintaining adequate finished product inventory allows a company to fill customer orders immediately. Maintaining adequate materials inventory allows a company to support manufacturing operations and the production plans. Failing to manage inventory adequately can lead to significant issues and inefficiencies throughout the supply chain, including dissatisfied customers, lost sales and revenues, poor cash flow and higher costs. The goal of inventory management is to meet customer expectations while also meeting the company"s financial targets. Inventory is the goods and materials that are held in stock for sales, service, production and maintenance.