Inventory Control Concepts for Managers
course's star rating by considering a number of different factors
such as the number of ratings, the age of ratings, and the
likelihood of fraudulent ratings.
Find online courses made by experts from around the world.
Take your courses with you and learn anywhere, anytime.
Learn and practice real-world skills and achieve your goals.
Not for you? No problem.
30 day money back guarantee.
Learn on the go.
Desktop, iOS and Android.
Certificate of completion.
|Section 1: My First Section|
|Keeping inventory means keeping stock of items for future use. In a typical production organization various items (raw materials) are purchased from outside, some processing is done on them internally (Work-in-progress) in one or more stages and then the finished products are finally made ready for…|
|As you know that inventory can get build-up at any of the stages like raw material, work-in-progress or finished product. If you try to list down the reasons of inventory build-up the list may look something like this: -- Supplier supplying the item before time, so before the existing stock gets exh…|
|While doing various activities in inventory control one has to take various decisions. Since we are mainly concerned about the quantity and value of the inventory, the kind of decisions involved are mainly. -- How much to order? -- When to order? -- Whom to order? Whom to order is a part of vendor d…|
|Here we derive a formula for Economic Order Quantity (EOQ) for single item deterministic and constant demand and lead time. As the name indicates EOQ is a quantity that we order in every order and it is economical too, to the extent that it minimizes the total cost. As discussed earlier, we will con…|
|1: An organization has to do a machine operation in which the machine setting time is 6 hours. The cost of machine setter is $ 8 per hour. What should be the economic lot size for production if the rate of inventory carrying cost is 15% and this operation is required to be done on 10000 pieces in a…|
|If we compute the ordering cost and inventory carrying cost for EOQ, we get Ordering cost = AD/Q = AD/ Sqrt (2AD/vr) = Sqrt (ADvr/2) Inventory carrying cost = Qvr/2 = (Sqrt (2AD/vr)) * vr/2 = Sqrt (ADvr/2) Thus, if we order for EOQ in every order then the total ordering cost and the total inventory…|
|Revise the EOQ (Economic Order Quantity) formula discussed in this course — EOQ = Sqrt (2AD/ VR) where Sqrt means square root of, A = Ordering cost/ order, D = total demand or consumption or requirement, V = unit cost of the item and R = rate of inventory carrying cost. This is a deterministic model…|
|To understand it better, let us visualize deterministic and probabilistic situations. A deterministic situation is one in which the system parameters can be determined exactly. This is also called a situation of certainty because it is understood that whatever are determined, things are certain to h…|