Inventory Management Flashcards
A measure of satisfying demand through inventory or by the current production schedule in time to satisfy the customer requested delivery dates and quantities.
SERVICE LEVEL
The target inventory, or order up to, value used in a periodic review system.
TARGET LEVEL
A lot sizing technique that will always cause planned or actual orders to be generated for a pre-determined fixed quantity, or multiples thereof.
FIXED ORDER QUANTITY
In general, a quantity of stock planned to be in inventory to protect against fluctuations in supply or demand.
SAFETY STOCK
An inventory record keeping system where each transaction in and out is recorded and a new balance is computed.
PERPETUAL INVENTORY RECORD SYSTEM
The classification of a group of items in decreasing order of annual dollar volume.
A=20% items, 80% cost
B=30% items, 15% cost
C=50% items, 5% cost
ABC ANALYSIS
An inventory accuracy audit technique where inventory is counted on a cyclic schedule rather than once a year.
CYCLE COUNTING
A lot sizing technique that generates planned orders in quantities equal to the net requirements in each period.
LOT FOR LOT
A physical inventory taken at some recurring interval.
PERIODIC INVENTORY AUDIT
A type of fixed order system in which inventory is carried in two bins. A replenishment quantity is ordered when the first bin in emptied.
TWO BIN SYSTEM
A type of fixed order quantity model that determines the amount of an item to be purchased or manufactured at one time. The intent is to minimize the combined costs of acquiring and carrying inventory.
ECONOMIC ORDER QUANTITY
An item at a particular geographic location
STOCK KEEPING UNIT
A form of independent demand management model in which an order is placed every set time interval. The order quantity is variable and essentially replaces the items consumed during the current time period.
PERIODIC REVIEW
An inventory method that places an order for a lot whenever the quantity on hand is reduced to a pre-determined level known as the order point.
ORDER POINT SYSTEM
A set of techniques that uses bill of material data, inventory data, and the master production schedule to calculate requirements for materials and components.
MATERIALS REQUIREMENTS PLANNING
