Chapter 4
Inventory Management
, Lecture Outline
• Elements of Inventory Management
• Inventory Control Systems
• Economic Order Quantity Models
• Quantity Discounts
• Reorder Point
• Order Quantity for a Periodic Inventory System
13-2
, What Is Inventory?
• Stock of items kept to meet future demand
• Purpose of inventory management
• how many units to order
• when to order
13-3
, Supply Chain Management
• Bullwhip effect
• demand information is distorted as it moves away
from the end-use customer
• higher safety stock inventories to are stored to
compensate
• Seasonal or cyclical demand
• Inventory provides independence from vendors
• Take advantage of price discounts
• Inventory provides independence between
stages and avoids work stoppages
13-4
Inventory Management
, Lecture Outline
• Elements of Inventory Management
• Inventory Control Systems
• Economic Order Quantity Models
• Quantity Discounts
• Reorder Point
• Order Quantity for a Periodic Inventory System
13-2
, What Is Inventory?
• Stock of items kept to meet future demand
• Purpose of inventory management
• how many units to order
• when to order
13-3
, Supply Chain Management
• Bullwhip effect
• demand information is distorted as it moves away
from the end-use customer
• higher safety stock inventories to are stored to
compensate
• Seasonal or cyclical demand
• Inventory provides independence from vendors
• Take advantage of price discounts
• Inventory provides independence between
stages and avoids work stoppages
13-4
