Term
| Which address inventory management at business level |
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Definition
| Agregate Inventory management |
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Term
| Which is concentrated at operational level |
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Definition
| Item inventory management |
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Term
| Lot-for-Lot rule has following characteristics |
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Definition
1.Items are ordered from suppliers and the factory in the amounts necessry, when they needed
2.Order qty change as requriements change
3.No unused lot-size inventory is created |
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Term
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Definition
1.A technique that causes orders to be generated for specific amounts
2.Often is based on what seems reasonable
3.Leads to inventory build up |
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Term
| Order "n" periods of supply is: |
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Definition
1.Based on an estimate of what is required to satisfy demand for "n" periods
2.Is used for inexpensive products (C items) |
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Term
| Economic Order Quantity model: |
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Definition
| manage tradeoffs between ordering costs and inventory carrying cost to determine how much to order. |
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Term
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Definition
| number of orders x cost per order |
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Term
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Definition
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Term
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Definition
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Term
| Inventory carrying cost = |
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Definition
(Q/2) x c x i
Q-lot size
c - cost of product
i - inventory carrying cost rate (in percantage) which include cost of capital, storage and risk |
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Term
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Definition
| annual ordering cost + anual carrying cost |
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Term
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Definition
Ordering costs equal carrying cost.
(Q x i x c)/2 = (A x S) / Q
EOQ = Q
A = Annual units
S = Order cost
i = inventory carrying rate
c = cost item |
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Term
| Order point and periodic review system are used for |
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Definition
| when to order independand items |
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Term
| key assumtions for Order Point System are |
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Definition
1.Order qty are usually fixed
2.Intervals between replenishment are not constant
3.Demand is stable and shows random variation |
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Term
| The ammount of safety stock depends on |
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Definition
variability of demand during lead time
frequency of ordering
desired service level
lenght of the lead time
ability to forecast and control lead times |
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Term
| The ability to supply customer with what is wanted when it is wanted is called |
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Definition
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Term
| The order point system rely on |
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Definition
The two bin system
Kanban
Perpetual inventory record system |
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Term
| Periodic review System is |
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Definition
1.Fixed intervals between orders
2.Qty ordered may vary between periods |
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Term
| ABC inventory control is based on |
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Definition
small number of items will represent the most critical values
separates the most sgificant items from the less important
it can be used to determine the dergee and level of control required |
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Term
| Control strategies for ABC classification |
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Definition
A.High priority (Tight control)
B.Medium priority (Normal)
C.Low priority (Simple) - large order qty, "n" periods of supply |
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Term
| For which item category it is required to be sure that they are plenty |
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Definition
| in "C" Clasification. These are low cost products. |
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Term
| Periodic inventory audit objective is |
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Definition
| to provide a valuation of inventory as part of the annual financial statement to stakeholders. |
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Term
| Cycle counting objective is |
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Definition
| To improve the processes that affect inventory accuracy. |
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Term
| Key features of cycle counting execution are: |
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Definition
Inventory accounting occurs continually throughout the year
Some counting occurs each day
Uses trained and dedicated staff
Items are counted a predetermined number of times per year depending on their importance. |
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