...mention that the amount of inventory of products and material contained in a store or factory at any given time. Store owners have to understand the precise number of goods on the shelves and storage areas in order to place an order or loss of control. Industrial unit managers have to to understand how much product’s units for buyer orders. Restaurants have to order extra food depend on their recent supply and the demand of the menu. All of these operations depend on the stock count to give a respond. The word "inventory" means the amount of goods and calculation of their performance. A lot company takes regular supply of inventory to avoid running out. Others take inventory, to make sure that the number of items ordered items to match the actual number counting. Shortage or excess inventory that theft (referred to as the "contract" retail circle) or inaccurate accounting practice. 1.1 Advantage and Disadvantage of hold inventory First advantage is improving customer service. By hold inventory can increase investment in inventory may result in a higher level of customer service and able to meet and anticipate customer demand. It also prompts and precise customer order upon request. Second advantage of hold inventory is economies of scale. Take advantage of per unit price reduction for purchasing in large quantity and enjoy economies of production as greater plant capacity and lower per unit manufacturing costs. The following is disadvantage of inventory such as consume space, higher...
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...how the inventory Updation takes place in the Inventory Management System for the products (both online and club) which are purchased from the eCommerce shopping site. Also this document will help you understand how the Inventory Management System is integrated with other applications in order to maintain the inventory level. 2. Overview of IMS: Global Inventory Management System is otherwise called as IMS. IMS is a single resource/entity where the inventory for all kinds of items is maintained/monitored. The different kinds of items available in the eCommerce shopping site are Online, Club and Auctions. The three important terms used in IMS are SUPPLY, DEMAND and AVAILABLE. These are the fields with which the inventory is monitored in IMS applications. SUPPLY – Overall Item Inventory available for purchase DEMAND – Ordered quantity by the customer for an item AVAILABLE – Item inventory available for purchase after the demand Let’s discuss more about these fields and the inventory updates in the following sections 3. Order Creation and Inventory Validation in IMS When an order is placed for an item from eCommerce application, immediately the inventory update happens in both Demand and Available fields in IMS application. When an item is added to shopping cart and on navigating to Shipping page, the item inventory is reserved for the ordered quantity in IMS. For example, let’s consider the item inventory as below before order creation. Supply – 10; Demand – 0;...
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...Chapter 7 Supply Chain Management _______ Types of inventory * By stages of production and value added * Raw materials (RM) * Work-in-progress (WIP) * Finished goods (FG) * They’re not equally costly * Finished goods are more valuable * They need to be managed differently * By function * Cycle stock (working stock): amount of inventory that you expect to sell * Safety stock (buffer stock): amount of inventory that you don’t expect to sell * Seasonal stock (anticipation stock): you don’t sell this particular product at all times * In-transit stock (pipeline stock): you bought something and they have shipped it, but you haven’t still received it. It may have costs such as insuring it. Also the slower the product moves, the later you can get your rate of return on the investment * Decoupling stock: ________ Reasons for carrying inventory * To reduce the negative effects of uncertainty * Demand * Supply * Production * Transportation * To gain economies of scale * Purchasing * Production * Transportation 1. Uncertainty a. Uncertainty in demand i. Customer demand is usually unknown ii. Maintain target customer service levels iii. Stock-out cost (you lose sales) vs. inventory carrying costs (you’re able to meet customer demand, but then you have extra) b. Uncertainty in supply ...
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...Why do we need inventory? 1 WE IE Managing economics of scale in a SC Cycle inventory (Ch 11) Managing uncertainty in a SC Safety inventory and risk polling (Ch 12, 13) 2 WE IE 1 2014/11/20 Managing Uncertainty in a Supply Chain — Safety Inventory Chapter 12 Wen‐Chih Chen Dept. of Industrial Engineering & Management National Chiao Tung University, TAIWAN 3 WE IE Safety Inventory Safety inventory is carried to satisfy possible demand that exceeds the amount forecasted. 4 WE IE 2 2014/11/20 Determining the Safety Stock Level Safety inventory uncertainty uncertainty Supply Demand Performance: availability (responsiveness), costs (efficiency) 5 WE IE Key Decisions What is the appropriate level of product availability? How much safety inventory is needed for the desired level of product availability? What actions can be taken to improve product availability while reducing safety inventory? 6 WE IE 3 2014/11/20 Measuring Product Availability Product fill rate (fr) % of product demand satisfied from product in inventory % of orders filled from available inventory % of replenishment cycles that end with ALL customer demand being met Order fill rate Cycle service level (CSL) 7 WE IE Measuring Demand Uncertainty : avg. demand @ period i : standard deviation (標準差) of demand (forecast error)...
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...work-in-process inventory, and finished goods from point of origin to point of consumption. Interconnected or interlinked networks, channels and node businesses are involved in the provision of products and services required by end customers in a supply chain. Supply chain management has been defined as the "design, planning, execution, control, and monitoring of supply chain activities with the objective of creating net value, building a competitive infrastructure, leveraging worldwide logistics, synchronizing supply with demand and measuring performance globally. A supply chain, as opposed to supply chain management, is a set of organizations directly linked by one or more upstream and downstream flows of products, services, finances, or information from a source to a customer. Supply chain management is the management of such a chain. Goal of supply Chain: The primary objective of supply chain management is to fulfill customer demands through the most efficient use of resources, including distribution capacity, inventory and labor. In theory, a supply chain seeks to match demand with supply and do so with the minimal inventory. Various aspects of optimizing the supply chain include liaising with suppliers to eliminate bottlenecks; sourcing strategically to strike a balance between lowest material cost and transportation, implementing JIT (Just In Time) techniques to optimize manufacturing flow; maintaining the right mix and location of factories and warehouses to serve customer markets...
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...Chapter 3 Supply Chain Drivers and Metrics True/False 1. The major drivers of supply chain performance are facilities, inventory, transportation, and information. Answer: True Difficulty: Moderate 2. The major drivers of supply chain performance are customers, facilities, inventory, transportation, and information. Answer: False Difficulty: Moderate 3. The two major types of facilities are production sites and storage sites. Answer: True Difficulty: Moderate 4. The two major types of facilities are distribution sites and storage sites. Answer: False Difficulty: Moderate 5. Inventory is an important supply chain driver because changing inventory policies can dramatically alter the supply chain’s efficiency and responsiveness. Answer: True Difficulty: Moderate 6. Information is potentially the biggest driver of performance in the supply chain as it directly affects each of the other drivers. Answer: True Difficulty: Easy 7. Information is potentially the biggest driver of performance in the supply chain even though it has little impact on each of the other drivers. Answer: False Difficulty: Easy 8. A facility with little excess capacity will likely be more efficient per unit of product it produces than one with a lot of unused capacity. Answer: True Difficulty: Easy 9. A facility with little...
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...Gary Lemming to address the issues: - Sales are down by 30% - Expenses have increased by 25% - Customers are leaving for other manufactures (loss in market share) - Service levels are low and customer cancellations and backorders are increasing - Inventory levels are very high, resulting in increasing inventory costs Purpose The purpose of this study is to determine the following: 1. What are the goals that Gary Lemming has been given by his CEO? How is the current performance impacting on Steel Works’ performance? 2. What are the operational goals and objectives of the Custom Department? What are the operational goals and objectives of the Specialty Department? 3. What are the operational challenges and objectives that Lemming faces from the departments? 4. How aligned are the departments within Steel Works? How do you anticipate that their individual performances align with the strategic goals and objectives of the company? 5. What does the current data tell you about Steel Works Inc. current business performance and supply chain performance? 6. What measures should Gary Lemming put into place to align Steel Works Inc. business and supply chain systems and promote efficiency in inventory management. Current Performance Jean Du Blanc, CEO of Steel Works Inc, has given Gary Leeming the following goals: - Reduce inventory levels and improve inventory...
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...INVENTORY MANAGEMENT SYSTEM CONTENTS • ACKNOWLEDGEMENT • INTRODUCTION • PURPOSE • INVENTORY INVESTMENT CONTROL • FACTOR THAT AFFECT INVENTORY MANAGEMNT • INVENTORY REPLENISHMENT • REQUIREMENT SPECIFICATIONS • DATA FLOW DIAGRAM (DFD) • ENTITY RELATIONSHIP DIAGRAM (ERD) • REFERENCES ACKNOWLEDGEMENT I am thankful to miss Maneet kaur for providing me the task of preparing the term paper on INVENTORY MANAGEMENT SYSTEM. I am at lovely believe in taking challenges and the term paper provided me the opportunity to tackle a challenge in the subject of data base management system. This term paper tested my patience at every step of preparation but the courage provided by my teacher helped me to swing against the tide and move against the winds. I am also thankful to my friends and my laptop to providing me help at every step of preparation of the term paper. INTRODUCTION You are in trouble if you have to keep telling customers, "I'm sorry we're out of that size. May we order it for you?" Even though the shirts are selling briskly, you will lose customers if you don't have an item in stock. When the customer spends, you have got to be ready with the goods. This is what inventory management is all about. In many retail and wholesale operations, the single largest asset is inventory. Control of this investment is vital. It will eliminate a number of the problems associated with capital shortages and will also provide capital to permit expansion of operations for increased sales and profit...
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...Introduction Inventory serves as a useful purpose in the supply chain. Many supply chain managers say firms can help decrease the need for inventory by carefully managing factors that cause inventory levels to increase. Inventory can be defined as the result of imbalance between supply and demand. The term inventory drivers comes from the consequences of certain supply or demand characteristics, such as: product desirability, responsiveness, information, collaboration, and visibility (St. John, 2008). The four common inventory drivers are: 1) demand/ capacity mismatches; smoothing inventories 2) demand/ process volume mismatches; cycle stocks 3) demand/supply uncertainty; safety stocks and 4) demand/supply chain lead time mismatches; anticipation inventories (Bozarth, 2011). Determining Inventory Levels Inventory decisions are normally determined by five key business drivers: consumer demand, lead time variability, pack mix, merchandising requirements, and service levels. However, with every decision there is always an area for error. Forecasting consumer demand involves factoring in lead time, lead time variability, and package size constraints. The best way to manage customer demand is to run a sales and operating plan across merchandise, supply chain, and store operations to tweak forecasts and reduce forecast errors. The key is to do a monthly review of forecasts for items with a stable demand, and for items with unstable demand and promoted categories they need a more...
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...Chapter 3 Supply Chain Drivers and Metrics True/False 1. The major drivers of supply chain performance are facilities, inventory, transportation, and information. Answer: True Difficulty: Moderate 2. The major drivers of supply chain performance are customers, facilities, inventory, transportation, and information. Answer: False Difficulty: Moderate 3. The two major types of facilities are production sites and storage sites. Answer: True Difficulty: Moderate 4. The two major types of facilities are distribution sites and storage sites. Answer: False Difficulty: Moderate 5. Inventory is an important supply chain driver because changing inventory policies can dramatically alter the supply chain’s efficiency and responsiveness. Answer: True Difficulty: Moderate 6. Information is potentially the biggest driver of performance in the supply chain as it directly affects each of the other drivers. Answer: True Difficulty: Easy 7. Information is potentially the biggest driver of performance in the supply chain even though it has little impact on each of the other drivers. Answer: False Difficulty: Easy 8. A facility with little excess capacity will likely be more efficient per unit of product it produces than one with a lot of unused capacity. Answer: True Difficulty: Easy 9. A facility with little...
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...Woolworths Supply Chain and Logistics Business Strategy This assignment is submitted in partial fulfilment of the requirements of the B.COM (HONS) IN TRANSPORT ECONOMICS Department of Business Management By BUSISIWE MNCUBE Student no: 920216064 At the UNIVERSITY OF JOHANNESBURG 13th March 2012 Tel: 084 312 4161 Table of Content 1. Abbreviations ........................................................3 2. Introduction ...........................................................4 3. Business focus areas ............................................5 4. Demand Management ..........................................5-6 5. Primary Distribution ...............................................6 6. Secondary Distribution ..........................................6 7. Inventory Management ..........................................7-8 8. Warehousing ..........................................................8-9 9. Packaging ...............................................................9 10. Material Handling ....................................................9-10 11. Information Technology ...........................................10 12. Reverse Logistics .....................................................10 13. Environmentally Sustainability ..................................11 14. Recommendation and Conclusion ............................12 15. Bibliography ................................................................
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...directly or indirectly in fulfilling a customer request. Includes manufactures, suppliers, transporters, warehouses, retailers and customers. Supplier-manuf.-dist.-retailer-customer. Objective of a SC is to maximize the overall value generated (profitability). SC=customer value -SC cost SC Decision phases: 1 - SC Strategy (design)– how to structure the supply chain over the next several years. EX: in-house or outsourcing, location and capacities of production and warehouses, products to be manufactured or sored, modes of transportation and type of info system to be utilized. 2 – SC Planning – time frame is a quarter to a year. The goal here is to maximize SC surplus that can be generated over the panning horizon given the constrains established during the strategic phase. Includes decision about which MKT will be supplied from each location, subcontracting g of manufacturing, inventory policies time and size of marketing and price promotions. 3 – SC Operation – time horizon is weekly or daily. Decisions regarding individual customer orders. SC config. here is fixed and planning policies are already defined. The goal is to handle incoming customer orders in the best way. Allocation of inventory or production to individual orders, set dates when an order is to be filled, generate pick lists at a warehouse, allocate an order to a shipping mode and shipment, set delivery schedule of trucks and place replenishment orders. Less uncertainty about demand info. (short term). Process views...
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...REVIEW OF SUPPLY CHAIN MANAGEMENT CONCEPTS AND THE BULLWHIP EFFECT H.M. Lai1 1Faculty of Engineering, Universiti Putra Malaysia, 43400 Serdang, Selangor, Malaysia. ahiu_mun@hotmail.com Keywords: Supply Chain Management, Bullwhip Effect, Inventory. Abstract. In recent years, the application of supply chain management in organization has become very popular. Business organizations today increasingly use the vital role of supply chain management to compete. This paper presents the basic concepts and literature review of supply chain management. The practice of supply chain management is guided by some basic underlying concepts that have not changed much over the centuries. This paper also discusses the common problem in supply chain management known as the bullwhip effect. 1. Introduction At present, the way the business is done has undergone radical transformation due to ever increasing expectations of consumers. The realization of importance of collaboration and integration among the partners has led to the idea of supply chain management. Organizations have realized the essentialness of an effective and efficient management of supply chain for present and future survival. Hence, the importance of supply chain management has grown over a period of time and plenty of planning models are now practiced by organizations across the globe. In adopting supply chain management, organizations must carry out a consistent set of management practices. 2. The Concept of Supply Chain...
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...INDEPENDENT DEMAND INVENTORY SYSTEM 1 ACROSS THE DISCIPLINES Inventory management is important to… • Accounting, which provides the cost estimates used in inventory control, pays suppliers and bills customers • Finance, which deals with the implications of interest or investment opportunity costs on inventory management and anticipates how best to finance inventory and the cash flows related to inventory • Management Information systems, which develops and maintains the systems for managing inventories • Marketing and sales, which create the need for inventory systems and rely on inventories to satisfy customers • Operations, which has the responsibility to control the firm’s inventories. LEARNING GOALS After reading this chapter, you will be able to… 1) Distinguish between the different types of inventory and know how to manage their quantities 2) Compute the economic order quantity and apply it in various situations 3) Develop policies for both the continuous review and the periodic review inventory control systems. 4) Identify ways to maintain accurate inventory records. [?] Copyright ( 2013 by Vaidy Jayaraman. To request copies, contact Vaidy Jayaraman at vaidy@miami.edu. No part of this publication may be reproduced without permission. INVENTORY CONCEPTS A definition: Inventory is a stock of material held to satisfy some eventual demand. It is created when the rate of receipts exceeds the rate...
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...from its customers and the inventory on hand in the distributors’ warehouse. Because of Barilla’s poor performance caused by shortages it is imperative that JITD is implemented in a proper manner that emphasizes the short term and long term gains that Barilla and its supply chain will have. Although most of the implementation can occur in a short period of time, in order for the supply chain to truly be successful, there must be long term investment for the vendor relationship and relationship with its internal members to truly be effective and successful. Issue Identification The following are a list of issues that must be addressed: * Distribution System * Extreme demand fluctuations * Distributor resistance * Internal resistance Issue Identification including Root Cause Analysis Distribution system Barilla has employed two main approaches to meet the end users’ needs. Barilla carries extra inventory in its factories in anticipation of any large pulls from its customer because it can’t produce product fast enough within the constraints of its production facilities. However, holding extra inventory is extremely expensive because there is no predictability in demand. Second, in order to minimize its inventory carrying costs, Barilla’s distributors also carry additional inventory with as much as 1450 Quintals, when the average demand is no more than 500 Quintals. Extreme demand fluctuations There are four main reasons why Barilla’s demand fluctuates...
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