Unit4 LogisticInventoryPartIPracticalReadingPassageA IntroductiontoInventoryInventoryis an idle stock of physical goods thatcontain economic value, and are held in various forms byan organization in its custodyawaiting packing,processingtransformation,use or saleinafuturepoint oftime.Any organization will necessarilyhold stock of variousphysical resources to aid in future consumption and saleAccording to the economic purposes,there are two basictypes of inventory:merchandising and manufacturingFor example,if you buy products from othercompanies to sell inyour own company,youll have amerchandise inventory, while if you make your ownproducts, you'll havea manufacturing inventoryManufacturing inventory is further divided into threecomponents: raw materials,work-in-process,finishedgoods
Unit 4 Logistic Inventory Passage A Introduction to Inventory Inventory is an idle stock of physical goods that contain economic value, and are held in various forms by an organization in its custody awaiting packing, processing, transformation, use or sale in a future point of time. Any organization will necessarily hold stock of various physical resources to aid in future consumption and sale. According to the economic purposes, there are two basic types of inventory: merchandising and manufacturing. For example, if you buy products from other companies to sell in your own company, you'll have a merchandise inventory, while if you make your own products, you'll have a manufacturing inventory. Manufacturing inventory is further divided into three components: raw materials, work-in-process, finished goods. Part I Practical Reading
Unit 4 LogisticInventoryRaw Materials InventoryRaw material inventory consists of basic materials that have not yet beencommitted to production in a manufacturing firm. The purpose of maintaining rawmaterial inventory is to separate the production function from the purchasingfunction so that any problem in shipment of raw materials do not cause productiondelays.Work-in-Process InventoryThis category includes those materials that have had work done on them buthavenot been completed.Its purpose is to uncouple the various operations intheproduction process so that machine failures and work stoppages in one operationwill not affect the other operations.FinishedGood InventoryThese are completed products awaiting sale.The purpose of finished goodsinventoryis to uncouple the productions and salesfunctions so that it no longer isnecessarytoproducethegoodsbeforeasalecanoccur
Raw Materials Inventory Raw material inventory consists of basic materials that have not yet been committed to production in a manufacturing firm. The purpose of maintaining raw material inventory is to separate the production function from the purchasing function so that any problem in shipment of raw materials do not cause production delays. Work-in-Process Inventory This category includes those materials that have had work done on them but have not been completed. Its purpose is to uncouple the various operations in the production process so that machine failures and work stoppages in one operation will not affect the other operations. Finished Good Inventory These are completed products awaiting sale. The purpose of finished goods inventory is to uncouple the productions and sales functions so that it no longer is necessary to produce the goods before a sale can occur. Unit 4 Logistic Inventory
Unit4LogisticInventoryBesides, there are other categories of inventory in accordance with thefunction it serves within the system. They are cycle (base) stock, safety (buffer)stock,pipeline(in-transit)stock,speculativestockCycle (base)stockrefersto inventorythat is needed to satisfynormal demandduring the course of an order cycle.Safety (buffer) stock refers to inventory that isheld in addition to cycle stock to guard against uncertainty in demand and/or leadtime.Pipeline (in-transit)stock isinventorythatis enroute between various nodesin a logistics system, while speculative stock is inventory that is held for severalreasons to include seasonal demand,projected price increases,and potentialproductshortages.Inventory existsinvarious categories.As such,thepurpose ofeach seemstobe that of maintaining a high level of customer service or part of an attempt tominimizeoverall costs
Besides, there are other categories of inventory in accordance with the function it serves within the system. They are cycle (base) stock, safety (buffer) stock, pipeline (in-transit) stock, speculative stock. Cycle (base) stock refers to inventory that is needed to satisfy normal demand during the course of an order cycle. Safety (buffer) stock refers to inventory that is held in addition to cycle stock to guard against uncertainty in demand and/or lead time. Pipeline (in-transit) stock is inventory that is en route between various nodes in a logistics system, while speculative stock is inventory that is held for several reasons to include seasonal demand, projected price increases, and potential product shortages. Inventory exists in various categories. As such, the purpose of each seems to be that of maintaining a high level of customer service or part of an attempt to minimize overall costs. Unit 4 Logistic Inventory
Unit4LogisticInventoryNotes1.Inventory is an idle stock of physical goods that contain economic value,andare held in various forms by an organization in its custody awaiting packingprocessing,transformation，useorsale in afuture pointoftime.本句由定语从句构成，后跟被动句以及现在分词作状语；由that引导的定语从句修饰先行词physicalgoods；被动句是are held...by an organization强调physical goods；现在分词awaiting作目的状语。全句可译为：库存是存储闲置的，且具有经济价值的实体产品。它们由一个机构以多种形式保管，等待着包装、加工、交易、使用或是在将来的时间点销售。2. Raw material inventory consists of basic materials that have not yet beencommitedtoproductioninamanufacturing firm.本句为定语从句；由that引导的定语从句修饰basicmaterials。全句可译为：原材料库存包括在制造业的企业里还没有用于生产的基本材料
Notes 1. Inventory is an idle stock of physical goods that contain economic value, and are held in various forms by an organization in its custody awaiting packing, processing, transformation, use or sale in a future point of time. 本句由定语从句构 成，后跟被动句以及现在分词作状语；由that引导的定语从句修饰先行词physical goods; 被动句是are held. by an organization强调physical goods；现在分词 awaiting作目的状语。全句可译为：库存是存储闲置的，且具有经济价值的实体产 品。它们由一个机构以多种形式保管，等待着包装、加工、交易、使用或是在将来 的时间点销售。 2. Raw material inventory consists of basic materials that have not yet been committed to production in a manufacturing firm. 本句为定语从句；由that引导的定 语从句修饰basic materials。全句可译为：原材料库存包括在制造业的企业里还没 有用于生产的基本材料。 Unit 4 Logistic Inventory
Unit 4 LogisticInventoryNewWordsidleadj.闲置的，未利用的completevt.完成stockn.存货，库存品，贮存uncouplevt.分开，解开affectvt.对.....有影响，对......起作用custodyn.保管，照管await vi.准备以待，等待着occurvi.发生，出现，存在packvt.包装uncertaintyn.不确定，不可靠transformationn.改变，转变noden.节，结project vt.预计，预测maintain vt.保持，维持shipmentn.装货，运货potential adj.潜在的delayvt.使延迟，使延期n.延期minimizevt.使减少（或缩小）到最低限度categoryn.种类，类别
New Words idle adj. 闲置的，未利用的 stock n. 存货，库存品，贮存 custody n. 保管，照管 await vi. 准备以待，等待着 pack vt. 包装 transformation n. 改变，转变 maintain vt. 保持，维持 shipment n. 装货，运货 delay vt. 使延迟，使延期 n. 延期 category n. 种类，类别 complete vt. 完成 uncouple vt. 分开，解开 affect vt. 对.有影响, 对.起作用 occur vi. 发生，出现，存在 uncertainty n. 不确定，不可靠 node n. 节，结 project vt. 预计，预测 potential adj. 潜在的 minimize vt. 使减少(或缩小)到最低限度 Unit 4 Logistic Inventory
Unit 4 LogisticInventoryPhrasesand Expressionsphysicalgoods实物：实体产品workstoppage停工economicvalue【经】经济价值nolonger不再merchandiseinventory商业库存enroute在途中cyclestock经常库存manufacturinginventory制造业库存bedividedinto被分成safety（buffer）stock安全（缓冲）库存work-in-process在制品in-transitstock 在途库存consistof由.构成speculativestock投机库存becommittedto致力于，用于referto涉及，指的是separate..from...把......和.....分开guardagainst 防止，提防leadtime从订货至交货的间隔时间attemptto尝试，试图做某事overallcost总成本，全部成本
Phrases and Expressions physical goods实物；实体产品 economic value [经] 经济价值 merchandise inventory 商业库存 manufacturing inventory 制造业库存 be divided into 被分成 work-in-process 在制品 consist of 由.构成 be committed to 致力于，用于 separate . from. 把.和.分开 work stoppage 停工 no longer 不再 en route 在途中 cycle stock 经常库存 safety (buffer) stock 安全（缓冲）库存 in-transit stock 在途库存 speculative stock 投机库存 refer to 涉及，指的是 guard against 防止，提防 lead time 从订货至交货的间隔时间 attempt to 尝试，试图做某事 overall cost 总成本，全部成本 Unit 4 Logistic Inventory
Unit 4 LogisticInventoryTask 1Mark the following statements with T(True)orF (False)accordingtothepassage.1.Inventory is defined as a stock of goods which are maintained on hand at ornear a business'slocation.T2. Merchandise inventory is further divided into three components: rawmaterials,work-in-process andfinishedgoods.F3.Work-in-Process refers to those materials that have had work done on themTbut have not been completed.4. In-transit stock is held in addition to cycle stock to guard against uncertaintyFindemandand/orleadtime.5.Each inventory aims to have a high level of customer service or part of anattempttomaximizeoverall cost.F
Task 1 Mark the following statements with T (True) or F (False) according to the passage. 1. Inventory is defined as a stock of goods which are maintained on hand at or near a business’s location. 2. Merchandise inventory is further divided into three components: raw materials, work-in-process and finished goods. 3. Work-in-Process refers to those materials that have had work done on them but have not been completed. 4. In-transit stock is held in addition to cycle stock to guard against uncertainty in demand and/or lead time. 5. Each inventory aims to have a high level of customer service or part of an attempt to maximize overall cost. T F T F F Unit 4 Logistic Inventory
Unit 4 LogisticInventoryTask2Translatethefollowingphrases intoChinese or English制造业库存1.manufacturing inventory2.cyclestock经常库存缓冲库存3.bufferstockin-transitstock在途库存安全库存5.safety stockeconomicvalue经济价值6.制成品7.finished good投机库存8.speculative stock
Task 2 Translate the following phrases into Chinese or English. 1. manufacturing inventory _ 2. _ 经常库存 3. buffer stock _ 4. _ 在途库存 5. safety stock _ 6. _ 经济价值 7. finished good _ 8. _ 投机库存 制造业库存 cycle stock 缓冲库存 in-transit stock 安全库存 economic value 制成品 speculative stock Unit 4 Logistic Inventory
Unit 4 LogisticInventoryPassage BNeed for Inventory ManagementInventory is a necessary evil that every organization would have to maintain forvarious purposes.Over inventory or under inventory both cause financial impact andhealthofthebusinessas well as effectbusinessopportunities.Inventory holding is resorted to by organizations as hedge against various externaland intemal factors, as precaution, as opportunity, as a need and for speculativepurposes.Thereasonsfor holdinginventories can vary fromcaseto casebasisMeet Variation in Production DemandProduction plan changes in response to the sales, estimates, orders and stockingpatterns.Accordingly the demand for raw material supplyfor production varies with theproduct plan in terms of specific SkU as well as batch quantities.Holding inventories ata nearby warehouse helps issue the required quantity and itemto production just in timeCater to Cyclical and Seasonal DemandMarket demand and supplies are seasonal depending upon various factors likeseasons; festivals etc.and past sales data help companies to anticipate a huge surge ofdemand in the market well in advance.Accordingly they stock up raw materials and holdinventories to be able to increase production and rush supplies to the market to meet theincreaseddemand
Passage B Need for Inventory Management Inventory is a necessary evil that every organization would have to maintain for various purposes. Over inventory or under inventory both cause financial impact and health of the business as well as effect business opportunities. Inventory holding is resorted to by organizations as hedge against various external and internal factors, as precaution, as opportunity, as a need and for speculative purposes. The reasons for holding inventories can vary from case to case basis. Meet Variation in Production Demand Production plan changes in response to the sales, estimates, orders and stocking patterns. Accordingly the demand for raw material supply for production varies with the product plan in terms of specific SKU as well as batch quantities. Holding inventories at a nearby warehouse helps issue the required quantity and item to production just in time. Cater to Cyclical and Seasonal Demand Market demand and supplies are seasonal depending upon various factors like seasons; festivals etc. and past sales data help companies to anticipate a huge surge of demand in the market well in advance. Accordingly they stock up raw materials and hold inventories to be able to increase production and rush supplies to the market to meet the increased demand. Unit 4 Logistic Inventory
Unit4 LogisticInventoryEconomiesofScaleinProcurementBuying raw materials in larger lot and holding inventory is found to becheaper for the company than buying frequent small lots. In such cases onebuysinbulkandholdsinventoriesattheplantwarehouseTakeAdvantage ofPrice Increaseand QuantityDiscountsIf there is a price increase expected few months down the line due tochanges in demand and supply in thenational or international market,impact oftaxes and budgets etc,the company's tend tobuy raw materials in advance andholdstocks as ahedgeagainst increased costs.Companies resort to buying in bulk and holding raw material inventories totake advantageofthe quantitydiscountsoffered bythe supplier.Reduce Transit Cost and Transit TimesBecause raw materials are imported from a foreign country or from a faraway vendor within the country,holding inventories can save a lot in terms oftransportation cost and transit time.Therefore,holding optimum inventory is the goal of every inventory plannerand to ensure company's money is notblocked
Economies of Scale in Procurement Buying raw materials in larger lot and holding inventory is found to be cheaper for the company than buying frequent small lots. In such cases one buys in bulk and holds inventories at the plant warehouse. Take Advantage of Price Increase and Quantity Discounts If there is a price increase expected few months down the line due to changes in demand and supply in the national or international market, impact of taxes and budgets etc, the company’s tend to buy raw materials in advance and hold stocks as a hedge against increased costs. Companies resort to buying in bulk and holding raw material inventories to take advantage of the quantity discounts offered by the supplier. Reduce Transit Cost and Transit Times Because raw materials are imported from a foreign country or from a far away vendor within the country, holding inventories can save a lot in terms of transportation cost and transit time. Therefore, holding optimum inventory is the goal of every inventory planner and to ensure company's money is not blocked. Unit 4 Logistic Inventory