Managing Inventory in the Supply Chain

Sources
1. Procurement
2. Production
3. Transportation
4. Marketing
5. Finance
6. Manufacturing
Uncertainty
1. Safety Stocks
2. Time
  1. Transportation
  2. Work-in-Process
Stocks
1. Seasonal
2. Antcipatory
Inventory Costs
1. Capital Cost
  1. interest or opportunity cost
2. Hurdle rate
3. Weighted Average Cost of Capital
4. Storage Space Cost
  1. Inventory Service Cost
    1. includes insurance and taxes
    2. Inventory Risk Cost
      1. Order or Set Up Cost
Carrying cost
1. Ordering Cost or Setup Cost
2. Order Cost
3. Setup Costs
In-Transit Inventory Carrying Cost
1. cost becomes especially important on global moves
2. storage space cost not relevant to inventory in transit
3. Insurance
Pull & Push
1. customer orders to move product through a logistics system
2. anticipation of demand to move products.
EOQ Model
1. Total Cost Model
2. Quadrant model
3. The Square-Root Rule
JIT
1. zero inventories
2. small, frequent replenishment quantities
MRP
1. Master production schedule (MPS)
2. Bill of materials file
3. Inventory status file
4. Outputs and reports
Distribution Requirements Planning
1. Forecast of demand for each SKU
2. Recommended replenishment quantity
Vendor-Managed Inventory
1. The supplier and its customer agree on which products are to be managed using in the customer’s distribution centers
2. Pull Data
ABC
1. A) items are considered to be the most important
Bibliogrfia: Supply Chain Management. A Logistics Perspective, ISBN 978-0-538-47918, 9th edition. Authors: Coyle, Langley, Novack, Gibson, Editorial Cengag

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Managing Inventory in the Supply Chain

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