Independent-Demand Inventory参考.ppt

Independent-Demand Inventory Chapter 15 Chapter Outline Introduction Purpose of Inventories Inventory Cost Structures Independent versus Dependent Demand Economic Order Quantity Continuous Review System Periodic Review System Using P and Q System in Practice ABC Inventory Management Introduction Inventory: a stock of materials used to facilitate production or to satisfy customer demand. Types of inventory Raw materials/purchased parts (RM/PP) Work in process (WIP) Finished goods (FG) Maintenance, repair operating supplies (MRO) A Material-Flow Process A Water Tank Analogy for Inventory Purpose of Inventories (1) To protect against uncertainties in demand (finished goods, MRO) supply (RM/PP, MRO) lead times (RM/PP or WIP) schedule changes (WIP) To allow economic production and purchase (as in discounts for buying RM/PP in bulk) Purpose of Inventories (2) To cover anticipated changes in demand (as in a level strategy) or supply finished goods RM/PP To provide for transit (pipeline inventories) RM/PP finished goods WIP (independence of operations) Inventory Cost Structures (1) Item or SKU cost Expressed as cost per unit or SKU. Gets into LIFO and FIFO issues. Problem can be compounded by quantity discounts. Inventory Cost Structures (2) Ordering (or setup) cost Paperwork, worker time (ordering) worker time, downtime (setup) Typically expressed as a fixed cost per order or setup. Inventory Cost Structures (3) Carrying (or holding) cost: Cost of capital (market rate or internal rate of return) Cost of storage (building, utilities, insurance, handling) Cost of obsolescence, deterioration, and loss (shrinkage) Management cost (record keeping, counting) Typically expressed as a percentage of SKU cost. Average in U.S. is estimated to be 35 percent per year. Businesses often use only cost of capital (understatement). Inventory Cost Structures (4)How the 35 percent carrying cost is distributed Cost of Capital—9-20 percent Obsolescence—2-5 percent Storage—2-5 percen