Inventory Management

Question 1

Independent Demand Items

Answer 1

goods ready to be sold or used.

Question 2

Dependent Demand Items

Answer 2

components that make up the finished product.

Question 3

Types of Inventory

Answer 3

• Raw materais and purchased parts
• Work in process
• Finished goods/ merchandise
• Tools and supplies
• Maintenance and repairs (MRO)
• Goods-in-transit to warehouses, distributors, or customers (pipeline inventory).

Question 4

inventory system

Answer 4

set of policies that control levels of inventory

Question 5

pressures of low inventory levels

Answer 5

holding or carryings costs:
storage and handling
interest or opportunity cost
obsolescence, insurance, taxes

Question 6

pressures for high inventory levels

Answer 6

1) customer service level costs: stock out and back orders
2) labor and equipment utilization
3) ordering or setup costs
4) transportation costs- inbound/outbound
5) purchase costs

Question 7

Continuous Review System

Answer 7

Fixed Order Quantity Model

Question 8

Anticipation Inventory

Answer 8

build up inventory during low demand to anticipate high demand in future. absorbs uneven rates of demand or supply.

Question 9

pipeline inventory

Answer 9

orders that have been places but not yet recieved