inventory mgmt 7
TRANSCRIPT
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Presented by
Amit Jaglan
Manish Vats
Neeraj BalaSakshi Vats
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Inventory & Inventory management
Purpose of inventory
Opposing views of inventories
Nature of Inventories
Inventory Systems
Inventory Classifications Models
Conclusion
OvervieOvervie
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stock of goods, commodities, or other economic resources
held by a firm at a particular time
for their future production requirements and
for their future demands.
assists organizations
in minimizing their inventory costwithout compromising on their ability to respond quickly to customerdemand.
InventoInvento
InventoryInventory
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Inventory management is concerned with the planning,implementation and control of the movement of physical objects andassociated information in general.
supply chain managementfocuses on the ultimate customer,who creates the demand, which in turn supports the existence of the
supply chain to provide the customer with the product.
INVENTORY MANAGEMANT AND SUPPLYINVENTORY MANAGEMANT AND SUPPLYCHAIN MANAGEMENTCHAIN MANAGEMENT
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Raw material
Semi finished goods
Finished goods
TYPES OFTYPES OF
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Smooth production
Better service to customers
Protection against Business uncertainties
Quantity discounts advantage
Purpose ofPurpose of
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Why We Want to Hold Inventories
Why We Not Want to Hold Inventories
Opposing Views ofOpposing Views of
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Improve customer service
Reduce certain costs
Contribute to the efficient and effective
operation of the production system
Why We Want to HoldWhy We Want to Hold
Visibility &Intelligence
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Certain costs increase such ascarrying costscost of diluted return on investment
capacity costslarge-lot quality costcost of production problems
Why We Do Not Want toWhy We Do Not Want toHold InventoriesHold Inventories
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Two Fundamental Inventory Decisions
Independent Demand Inventory Systems
Dependent Demand Inventory Systems
Inventory Costs
Nature ofNature of
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How much to order of each materialwhen orders are placed with eitheroutside suppliers or production
departments within organizationsWhen to place the orders
Two Fundamental InventoryTwo Fundamental InventoryDecisionsDecisions
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Demand for an item carried in inventoryis independent of the demand for anyother item in inventory
Finished goods inventory is an exampleDemands are estimated from forecasts
and/or customer orders
Independent DemandIndependent DemandInventory SystemsInventory Systems
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B(4) C(2)
D(2) E(1) D(3) F(2)
Dependent Demand(components)
A
Independent
Independent Vs. DependantIndependent Vs. Dependant
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Purchase Cost
Carrying Cost
Ordering Cost
Stock-out Cost
InventoryInventory
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Single period Inventory System
Multi- period Inventory System
Fixed order quantity system(Q-system)
Fixed order period system(p-system)
InventoryInventory
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IDLE STATEWaiting for demand
DEMAND OCCURSUnits withdrawn
from inventory orback ordered
COMPUTIVE INVENTORYPOSITION
Position=on hand +onorder-back order
Is position
p reorderpoint
Issue an orderfor exactly Q
units
yesno
IDLE STATEWaiting for demand
COMPUTIVE INVENTORYPOSITION
Position=on hand +onorder-back order
Compute order quantity tobring inventory upto
required level
Issue an order for
number of unitsneeded
DEMAND OCCURSUnits withdrawnfrom inventory
Hasreviewtime
arrived
no
yes
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Annual Cost $Annual Cost $
Order uantitOrder uantit
MinimumMinimum
Total AnnualTotal Annual
Stocking CostsStocking Costs
AnnualAnnualCarr inCarrying
AnnualAnnualOrderin CostsOrderin Costs
Total AnnualTotal AnnualStockin CostsStockin Costs
SmallerSmaller Lar erLar er
Lowe
r
Lowe
r
Hiher
Hiher
EOEO
alancing Carrying against Ordering Cosalancing Carrying against Ordering Cos
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ABC classification
VED Classification
FSND Classification
Inventory classificationInventory classification
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ThankThankThankThank