MAN3504 Lecture Notes - Lecture 10: Safety Stock, Operations Management, Stockout
Document Summary
Operations management: inventory management review system and safety stock. Use review system: two review systems, continuous review (q system, periodic review (p system, continuous review system (q) Inventory level is checked after each inventory transaction: order placed when reorder point (r) reached, fixed order quantity (eoq, commonly used in retail, requires a software supported inventory management system because of frequent inventory review. Inventory position (ip: the inventory position represents a theoretical inventory level. Inventor position = on hand inventory (oh) + scheduled receipts (sr) . Backorders (bo: reorder point, the reorder point (r) determines if a new order has to be placed. If ip > r don"t place order: reorder point, certain demand (theoretical, with constant demand and no uncertainty the reorder point is equivalent to the demand during lead time, r= d*l, reorder point, uncertain demand. In addition, t includes a safety stock to protect against uncertainty in demand during.
