Chapter 4 Inventory Strategies and Management Inventory Functionality Inventory Cost Planning Inventory Inventory Management Practices
Inventory Functionality Inventory Cost Planning Inventory Chapter 4 Inventory Strategies and Management Inventory Management Practices
4.1 Inventory Functionality Key points: geographical specialization; decoupling; balancing supply and demand; buffering uncertainty Difficult points: four prime functions of inventory Requirements: By the end of this lesson, you should be able to describe the ideal situation from an inventory perspective. understand four prime functions of inventory
Key points: geographical specialization; decoupling; balancing supply and demand; buffering uncertainty Difficult points: four prime functions of inventory Requirements: By the end of this lesson, you should be able to describe the ideal situation from an inventory perspective. understand four prime functions of inventory. 4.1 Inventory Functionality
Inventory Functionality From an inventory perspective, the ideal situation would be response capability to manufacture products to customer specification. While a zero-inventory manufacturing/ distribution system is typically not attainable, it is important to remember that each dollar invested in inventory is a trade-off with an alternative use of assets that may provide a better return
From an inventory perspective, the ideal situation would be response capability to manufacture products to customer specification. While a zero-inventory manufacturing/ distribution system is typically not attainable, it is important to remember that each dollar invested in inventory is a trade-off with an alternative use of assets that may provide a better return. Inventory Functionality
Sentence Explanations 尽管零存货的生产/分销体系通常 是很不容易生成的,重要的 是要记住投资于存货的每 美元都要与获得更多回报的 文使用进行均衡 1. While a zero-inventory manufacturing/distribution system is typically not attainable, it is important to remember that each dollar invested in inventory is a trade-off with an alternative use of assets that may provide a better return
1. While a zero-inventory manufacturing/distribution system is typically not attainable, it is important to remember that each dollar invested in inventory is a trade-off with an alternative use of assets that may provide a better return. Sentence Explanations 尽管零存货的生产/ 分销体系通常 是很不容易生成的，重要的 是要记住投资于存货的每一 美元都要与获得更多回报的 资产使用进行均衡
Sentence Explanations Given a specific 甘|→温副 manufacturing/marke ting strategy, inventories planned and committed to operations can only 需|要恐头卡 be reduced to a level consistent with performing the four inventory functions
2. Given a specific manufacturing/marke ting strategy, inventories planned and committed to operations can only be reduced to a level consistent with performing the four inventory functions. Sentence Explanations
Sentence Expla pl nations 由于不同季节所积累的经验, 在需求高峰期所需要达到 边际销售量的存货就能够 计划得相当完善。 3. With accumulated experience over a number of seasonal periods, the inventory required to achieve marginal sales during periods of high demand can be projected fairly well
3. With accumulated experience over a number of seasonal periods, the inventory required to achieve marginal sales during periods of high demand can be projected fairly well. Sentence Explanations 由于不同季节所积累的经验， 在需求高峰期所需要达到 边际销售量的存货就能够 计划得相当完善
Questions 1. What would the ideal situation be from an inventory perspective? 2. Why do many enterprises still carry an average inventory that exceeds their basic requirements? Discuss the reasons through the four prime functions of inventory. 3. What are the four functions of inventory? 4. Discuss how the inventory creates value and reduce total cost
1. What would the ideal situation be from an inventory perspective? 2. Why do many enterprises still carry an average inventory that exceeds their basic requirements? Discuss the reasons through the four prime functions of inventory. 3. What are the four functions of inventory? 4. Discuss how the inventory creates value and reduce total cost. Questions
4.2 Inventory Cost Key points: inventory cost; cycle inventory; fixed ordering cost; holding cost Difficult points: cycle inventory; fixed ordering cost Requirements: By the end of this lesson, you should be able to describe cycle inventory. understand the concept of the fixed ordering cost. understand the concept of hold cost understand the effects which should be considered in any lot sizing decision
4.2 Inventory Cost Key points: inventory cost; cycle inventory; fixed ordering cost; holding cost Difficult points: cycle inventory; fixed ordering cost Requirements： By the end of this lesson, you should be able to describe cycle inventory. understand the concept of the fixed ordering cost. understand the concept of hold cost. understand the effects which should be considered in any lot sizing decision
Inventory Cost H=hC To summarize, the costs that must be considered in any lot sizing decision are as follows Average price per unit purchased, S C/unit Fixed ordering cost incurred per lot, $S/lot Holding cost incurred per unit per year, $h/unit/year hC
Inventory Cost H=hC To summarize, the costs that must be considered in any lot sizing decision are as follows: Average price per unit purchased, $C/unit Fixed ordering cost incurred per lot, $S/lot Holding cost incurred per unit per year, $h/unit/year = hC
Sentence Explanations 在我们能够建议一位经理采取降低循环存货 的行动之前,理解其在供应链中处于哪 个生产阶段或在大批量采购中处于何 种地位,以及怎样减低生产或采购规模 能够影响供应链的运作是非常重要的。 1. Before we can suggest actions that a manager can take to reduce cycle inventory, it is important to understand why stages of a supply chain produce or purchase in large lots and how lot size reduction affects supply chain performance
1. Before we can suggest actions that a manager can take to reduce cycle inventory, it is important to understand why stages of a supply chain produce or purchase in large lots and how lot size reduction affects supply chain performance. Sentence Explanations 在我们能够建议一位经理采取降低循环存货 的行动之前，理解其在供应链中处于哪 一个生产阶段或在大批量采购中处于何 种地位，以及怎样减低生产或采购规模 能够影响供应链的运作是非常重要的
