GMS 401 Study Guide - Safety Stock, Railways Act 1921, Barcode

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Document Summary

Inventory management is concerned with planning and controlling inventories. Functions of inventories: to wait while being transported: raw materials, and parts from suppliers, and finished goods from manufacturers heading to markets need to be transported. This is usually done by ship, rail, truck, or planes. Time of shipment depends on the mode of transportation: to protect against stock-outs: delayed deliveries and unexpected increases in demand increase the risk of stock-outs or shortages. Delays can occur because of weather conditions, supplier stock-outs, deliveries of wrong materials, quality problems, and so on. This necessitates storing some or all of the purchased goods for later use. Similarly, it is usually economical to product in large rather small quantities. Again, the excess output must be stored for later use. Requirements for effective inventory management: safely storing and using inventories. Most inventory items need to be protected from harsh outdoor environments such as rain and snow.