DSCI 304 Final: Op MGMT CHapter 13
1 Dec 2016
School
Department
Course
Professor
Document Summary
Inventories are a vital part of business for 2 reasons (1) necessary for operations (2) contribute to customer satisfaction. Independent demand items: items that are ready to be sold or used. A typical firm has roughly 30% of its current assets and as much as 90% of its working capital invested in inventory. There are 2 main concerns in inventory mgmt (1) level of customer service. Having the right goods available at the right quantity at the the right place at the right time (2) cost of ordering and carrying inventories. The overall objective of inventory mgmt is to achieve satisfactory levels of customer service while keeping inventory costs within reasonable limits. There are measures of performance that dictate if this is being satisfied. A system to keep track of inventory. Knowledge of lead time and lead time variability. Reasonable estimates of holding costs, ordering costs, shortage costs. Periodic system: physical count of items in inventory made at periodic intervals.
