Chapter 24: Inventory Managment Flashcards
Define Inventory (stock)
Inventory (stock): materials and goods required to allow for the production and supply of products to the customer.
Define economic order quantity
Economic order quantity: the optimum or least-cost quantity of stock to re-order taking into account delivery costs and stock-holding costs.
Define Re-order quantity
Re-order quantity: the number of units ordered each time.
Define lead time
Lead time: the normal time taken between ordering new stocks and their delivery.
Define buffer inventories
Buffer inventories: the minimum inventory level that should be held to ensure that production could still take place should a delay in delivery occur or should production rates increase.
Define just-in-time
Just-in-time: this inventory-control method aims to avoid holding inventories by requiring supplies to arrive just as they are needed in production and completed products are produced to order.
Define inventory management
Inventory management is the process of planning, organizing, and controlling storage to minimize costs, meet customer demand and maximize efficiency
Define reorder level
Reorder level is the minimum level of inventory that the business reorders to ensure continuous supply
Define supply chain
Supply chain is the network of organizations, activities and resources involved in the production and delivery of a product or service from raw materials to end customer
Define supply chain management
Supply chain management is the coordination of management of activities, resources, and organizations involved in the production and delivery of products or services from raw materials to end customer to sustain competitive advantage
Define just in case inventory management
Just in case is when businesses hold large inventories on hand than is usually requires just in case there is a hold up or unforeseen increase in demand
