Term
| Enterprisewide perspective for Inventory is |
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Definition
| How to smooth and manage the flow of materials through the materials transformation process to the finished goods stage |
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Term
| Supply chain perspective for Inventory is |
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Definition
| How to smooth the inflow of materials from suppliers and the outflow to customers to meet financial and stratigic objectives |
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Term
| Objectives of aggregate Inventory Management are |
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Definition
1.Support business strategy and operations
2.Ensure that inventory management support financial objectives
3.Balance customer service, operations efficiency, and inventory investment cost objectives. |
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Term
| Anticipation inventory is |
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Definition
| build up in advance of events (like peak selling seasons, sales promotions, and production shutdowns). |
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Term
| Level production strategy uses |
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Definition
| Anticipation inventory to accommodate seasonal demand and minimize operating costs, though carryying costs will increase as inventory builds up when demand is low. |
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Term
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Definition
| also called safety stock. It's function is to cover random fluctuation in supply, demand and lead time. |
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Term
| Lot-size inventory consist of |
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Definition
| ietms purchased or manufactured in lot-size quantities greater than needed for a number of reasons: qty discount, reduced shipping, handling, etc. Also known as Cycly stock. |
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Term
| Transportation inventory is |
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Definition
| the inventory in transit in the distribution network. Also known as pipeline stock. Faster flow means less volume needs to be in transit to meet a given customer demand. |
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Term
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Definition
| a form of inventory build up to buffer against events that may not happen (speculation about the effects of weather, natural disaster, political events etc.) |
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Term
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Definition
| refers to materials purposely maintained at different points in the production process. They are used in TOC to ensure achievement of throughput and due date performance objective. |
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Term
| Objective of aggregate inventory management is |
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Definition
1.Best customer service
2.Low-cost plant operations
3.Minimum inventory investment |
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Term
| Manufactured item costs include |
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Definition
Direct material
Direct labour
Factory overhead |
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Term
| Item purchase price include the cost of |
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Definition
Transportation
customs duties
insurance
/total of these costs is called landed cost/ |
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Term
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Definition
Capital costs
Storage costs
Risk costs |
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Term
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Definition
1.Obsolescence
2.Damage
3.Pilferage
4.Deterioration
5.Insurance |
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Term
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Definition
1.Production control costs
2.Set up and teardown costs
3.Lost capacity cost
4.Purchasing costs |
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Term
| Capacity-related Costs include |
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Definition
1.Overtime
2.Hiring
3.Layoff
4.Training
5.Shift premium |
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Term
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Definition
1.Backorder costs
2.Lost sales costs
3.Lost customer service costs
4.Expediting costs
5.Additional manufacturing and purchasing costs |
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Term
| Which method assumes that the oldest items are sold first |
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Definition
| FIFO (first in, first out) |
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Term
| Whi method assumes that newest items in inventory are sold first |
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Definition
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Term
| Which system uses the weghted cost of items, based on qty to determine the cost of goods and inventory calculation. |
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Definition
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Term
| Which system uses costs determined in advance of production. Costs based on pre-established standards for labor, material and MRO allocations. |
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Definition
| Standard cost accounting system |
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Term
| Inventory turns measure the speed of inventory conversion into sales with formula: |
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Definition
| inventory turns = annual cost of goods sold/average inventory in dollars |
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Term
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Definition
the ratio of inventory on hand to average daily usage, or sales.
Days of supply = inventory on hand/average daily usage |
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