BU395 Chapter Notes - Chapter 12: Longrun, Batch Production, Warehouse Management System
Document Summary
Good inventory management is important for the successful operation of most organizations and their supply chains. Poor inventory management hampers operations, diminishes customer satisfaction, and increases operating costs. Inventory an idle material or product usually in a warehouse or storeroom. Inventory management planning and controlling the inventories. A typical company probably has about 30% of its current assets and perhaps as much as 90% of its working capital invested in inventories. Inadequate management of inventories can result in both under- and overstocking of items. Understocking results in missed deliveries, lost sales, dissatisfied customers, and production stoppage. Overstocking unnecessarily ties up funds that might be more productive elsewhere and also ties up storage space. Inventory management has two main concerns: level of customer service (availability) to have the right goods, in sufficient quantities, in the right place, at the right time, costs of ordering and holding inventories.
