33:799:301 Lecture 8: Week 5 - Part 2 - 02_18_2019

• School: Rutgers University
• Department: Supply Chain Management
• Course: 33:799:301
• Professor: A Taitt

Document Summary

Deploy product where it will be used. Supply pattern is different from demand pattern. Speculative buying in anticipation of price increase. Economical order size, lot size, production output. Smoothing production and reducing peak period capacity needs. Goal is to help company to be more profitable by lowering cost of goods sold and/or by increasing sales. Reducing the amount of inventory in stock. Ensuring there is enough inventory to satisfy demand. The right amount of inventory depends on a number of factors. Protect against fluctuations in demand or supply. Planned for future event of defined period of time. Inventory that is already out in the market. Stock that is expired, damaged, or no longer needed. Never be used or sold at full value. Unusable inventory takes up space and costs money to maintain. Run the manufacturing operation and the business. Consumed during conversion of raw materials into finished goods. Covers for variability in both supply and demand.