4. Matching Supply with Demand Reduce the risk of supplier failure Protect against lead-time uncertainties Meet unexpected demands Smooth seasonal or cyclical demand Lot size considerations Hedge against anticipated shortages and price increases Ensure rapid replenishment of items in constant demand Reasons for Keeping Inventory (Pg 316)
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6. Aims of Inventory Management (Pg 318) Matching Supply with Demand Provide internal and external customers with required service levels at optimum cost Ascertain present and future requirements for all types of inventory to avoid overstocking Keep stocks to a minimum by variety reduction Provide upstream and downstream inventory visibility in the supply chain
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8. Matching Supply with Demand The demand for the final product The inventory policy Whether job, batch, assembly or process production methods are applicable Whether demand is independent or dependent The service level Market conditions Factors determining EOQ Manufacturing/Assembly Type Organisations – Factors that Determine the Right Quantity (Pg 328)
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10. JIT systems “ Pull” Systems “ Push” Systems Matching Supply with Demand Inventory Control Systems Pre-determined re-order levels Periodic review systems Elements of Both “Push” and “Pull” Systems MRP and OPT systems MRP – Material planning planning Page 347 OPT – Optimised production technology Page 89 JIT – Just in time Page 342 Page 335 - 336
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