Inventory Control Fundamentals
Materials and supplies carried on hand either for sale or for use in the product process
What is inventory?
Item or unit load is handled, stored, and recorded
The most widely used inventor management system in distribution operations
What is a warehouse management system?
Items are 20% of the items that account for 70% of the annual consumption value of the items
What are the "A" items in A, B, C analysis?
Inventory levels must be monitored between ordering times to ensure that the order schedule keeps stock quantities at sufficient levels to fulfill orders
What is cyclical ordering?
The process of identifying materials, managing storage space, and tracking and controlling those materials
What is inventory control?
Total inventory movement
What is aggregate inventory management?
Allows employees to identify a variety of dats such as quantity, location, status, and other relevant information
What is a warehouse management system?
80% of results come from 20% of input
What is the Pareto principle?
Is based on order points and quantities instead of time and when inventory levels fall to a certain point, items are re-ordered
What is a fixed-order quantity system?
One of the basics of warehousing and distribution allowing companies to know what they have on had and where it is located in the warehouse
What is inventory control?
Item inventory management deals with inventory at the item level
What do frontline logistics workers mainly deal with?
To produce precisely the necessary unit sin the necessary quantities at the necessary time
What is Just-in-Time inventory control?
First-in-First Out (FIFO)
Last-in-Last Our (LIFO)
What are two methods of inventory management that determine when an item is used or picked for delivery based on when the product or material arrived at the facility?
A computer-based method of inventory management that monitors stock levels and expected production and determines how much needs to be ordered at any given time
What is Material Requirements Planning (MRP)?
Raw material stock
Work-in-process (WIP)
Finished goods
What are types of inventory?
A simple formula is to divide total dollars shipped annually by the average monthly inventory on hand plus safety stock
What is inventory turns or inventory turnover?
Developed by Japanese business and closely tied to the Toyota production system challenging traditional business concepts
What is Just-in-Time inventory system?
Cyclical ordering
Fixed-order quantity system
Material requirements planning
What are inventory control methods that identify when to order materials?
Inventory is based on A-B-C analysis and determines the number of counts per years
What is cycle counting?
What can be a major headache for distribution managers?
What are inventory peaks incurred due to seasonality demands?
Business use to assess competitiveness, project profits, and how well the business is doing
What is inventory turns or turnover?
Minimize inventory
Produce only what is needed
Consider anything over the minimum amount required as waste
Respond quickly to changes in demand
What are Just-in-Time concepts?
A time-based system in which items are ordered based on anticipated usage according to a predetermined schedule
A complete supply chain dedicated to the reverse flow of products and material for the purpose of returns, repairs, remanufacture, and/or recycling
What is reverse logistics or product returns?