24.1 Managing inventory

Question 1

Inventory

Answer 1

Materials and goods held by a business and required to allow the production of products and their supply to the customer.

Question 2

Inventory management

Answer 2

The process of ordering, storing, and using a company’s inventory.

Question 3

Economic order quantity (EOQ)

Answer 3

Optimal inventory order amount to minimize costs.

Question 4

Buffer inventory

Answer 4

Extra inventory to protect against supply chain disruptions.

Question 5

Re-order quantity

Answer 5

Number of units ordered each time.

Question 6

Lead time

Answer 6

The time between ordering new supplies and their delivery.

Question 7

Re-order level

Answer 7

The level of inventory that triggers a new order to be sent to suppliers.

Question 8

Supply chains

Answer 8

Network of people and resources involved in making and delivering a product.

Question 9

Supply chain management

Answer 9

Handling the entire production flow of products to minimise costs but improve customer service.