1er Parcial

Question 1

¿What is inventory?

Answer 1

Is a stock of items kept by an organization to meet internal or external demand

Question 2

What is operations management

Answer 2

Activities that relate to the creation of goods and services through the transformation of inputs to outputs.

Question 3

What is inventory management

Answer 3

Inventory management is the activity which organizes the availability of items to the customers.

Question 4

What is the role of inventory?

Answer 4

The role of inventory is to meet the required demand at a minimum cost, optimizing three targets: customer service, inventory costs, operating costs.

Question 5

Motivation for holding inventories

Answer 5

Economies of scale: The more you produce, the more you reduce the price per product.
Uncertainties: The uncertainty of external demand
Speculation: When the value of a item is expected to increase.
Transportations: when transportation times are long, the investment in pipeline inventories can be substantial.
Smoothing: producing and storing inventory in anticipation
of a peak demand.
Logistics: constraints can arise in the purchasing,
production, or distribution of items that force the
system to maintain inventory.
Control costs: cost of maintaining and inventory
control system

Question 6

Types of inventories:

Answer 6

Raw Materials
WIP
MRO: Inventories devoted to maintenance/repair/ operating.
FG Inventories

Question 7

What are the fundamental decisions in inventory management

Answer 7

When to order

How much to order

Question 8

Nature of the demand

Answer 8

Independent vs dependent

Deterministic vs stochastic

Question 9

What is Leadtime

Answer 9

is the amount of time that elapses from

the instant an order is placed until it arrives

Question 10

What is perishability

Answer 10

Something that canot be storage for a long time because it gets bad

Question 11

Conitinous vs periodic

Answer 11

A constant amount is ordered when
inventory declines to a predetermined level

An order is placed for a variable amount
after a fixed amount of tim

Question 12

Inventory Turnover Ratio

Answer 12

(how quickly goods are moving)

```
ITR = (Average Demand)/
Average Inventory
=
(Cost of Goods Sold)/
(Average Inventory Value)
~~~

Question 13

Why does ITR matter?

Answer 13

It tells how quicky your company is selling inventory
It can be used as an accurate comparison to
industry averages.
Measure your company’s sales volumes

Question 14

DIO

Answer 14

(average number of days a company holds inventory before
selling it)

DIO = (Inventory Level for a Period)
(Total Revenue) ⇥ Days (in Period)

Question 15

Key Issues Faced by Operations Managers

Answer 15

Priorities for managing SKU
Ensuring the inventory- related data are accurate and reliable
Integrating technology to support inventory

Question 16

ABC Analysis

Answer 16

Classifying inventory according to its dollar value
Application of Pareto principal
Few critical inventory parts and not the many trivial ones

Question 17

Categories of ABC Analysis

Answer 17

“A” items 15% items 70 to 80% of the total dollar value
“B” 30% of inventory and 15 to 25% of the total value
C items 50% of the inventory and 5% to 15% of the total value

Question 18

Characteristics of A products

Answer 18

Represent a substantial inventory investment
Limited availability
Close control to reduce uncertainties
Continous monitoring of inventory

Question 19

Characteristics of ´B´ Products

Answer 19

In many cases these are ordered very infrequently
• Consist mainly of service parts
• Could be reviewed periodically
• Less sophisticated forecasting methods could be
used

Question 20

Characteristics of “C” products

Answer 20

Very inexpensive items with moderate levels of demand
Large lot are recommended to minimze the frequency that these items are ordered
• Can be controlled using automated computer system

Question 21

Situations which typically arrive abc analysis

Answer 21

✦ Too many A class items
✦ Large number of products (D
class)
✦ Non-moving items (O class)
✦ Fixed stock level items (F class)
✦ Non-Stock items

Question 22

Good inventory policies are

Answer 22

meaningless if management does not

know what inventory is on hand.

Question 23

Supply chain functions.

Answer 23

Physical mediation
Reduce costs of production, transportation, storage
More for functional products than innovative

Market mediation
Supply exceeds demand, be prepared for fluctuations in demand
Speed flexibility, better for innovative products

Question 24

Efficient process vs responsive process

Answer 24

The efficiente process is the process which take cares about reducing costs and produce more with less always improving knowing your demand

And the responsive process is the process that have the ability to change waiting for the demand because is more dificult to forecast the demand.
But