BUAD 331 Study Guide - Midterm Guide: Number One Electronic Switching System, Kroger, Information Technology Management
Document Summary
Lead times: anticipatory fulfillment 2) lean 3) agile. Demand is supported by deploying inventory in anticipation of projected sales. Order point systems- determine when and how much to order. The level of inventory that minimizes the total inventory holding costs and ordering costs. Assumes- daily demand is the same, orders are never late, and inventory is heading to 0. Reorder point= lead time * daily demand. Reorder point now = lead time *daily demand + safety stock. Safety stock protects against variations in demand. Drives lower total cost at lower order quantity. Reduce uncertainty by managing demand and order cycle time variance. High volume, low variety and predictable environments. Reduced cycle stock model with safety stock- reduces supply variability. Eliminates uncertainty by postponing form and/or time and place utility until order received and then rapidly respond when order is received. Paint store has basic colors that can be mixed to make any order.
