33:799:310 Lecture 3: 3 Inventory Concepts
Document Summary
A function of cycle time for a product. Necessary to keep machinery and processes productive. Inventory form and function: defining inventory by cause is a simple but extremely powerful mechanism to promote supply chain improvements. Sean willems, inventory optimization: evolving from fad to necessity. Products are functionally capable but not saleable: pipeline stock is all the inventory moving through the supply chain. Inventory statistics: bureau of economic analysis reports business inventory data, which is widely tracked by wall street analysts, during the recession in 2008-09, business cuts inventory significantly when facing liquidity crisis. The inventory liquidation contributes the slump of gdp: during the recovery in 2009-10, inventory building contributes greatly for gdp growth. Q4 of 2009, 2. 8 percentage points to gdp growth of 5% Q1 of 2010, 2. 6 percentage points to gdp growth of 3. 7% Q2 of 2010, 1 percentage point to gdp growth of 2. 4% Q3 of 2010, 1. 4 percentage point to gdp growth of 2. 0%
