Inventory Flashcards
1
Q
What type of inventory system do you use Newsvendor for?
A
Dependent demand
2
Q
Why hold raw materials inventory?
A
As a buffer against supply uncertainty
3
Q
What type of inventory management system do you use EOQ for?
A
Independent demand.
4
Q
Why hold WIP inventory?
A
As a buffer against process uncertainty.
5
Q
Why hold finished goods inventory?
A
As a buffer against demand uncertainty.
6
Q
Ideally, how much inventory do you want to hold, on average, for dependent demand?
A
None.
7
Q
What does EOQ balance?
A
The cost of ordering (set-up) and holding inventory.
