This presentation tells about the inventory models. It describes the two widely used inventory models i.e. Fixed Recorder Quantity System and Fixed Order Period System.
This document discusses inventory management. It defines inventory as materials obtained in advance of need that are held until used or sold. There are different types of inventories like raw materials, work in progress, spare parts, and finished goods. Inventory valuation involves determining inventory quantities and assigning values. Holding inventory incurs costs like storage, ordering, shortages. The objectives of inventory control are to ensure smooth operations while minimizing costs and risks through techniques like determining economic order quantities and stock levels.
INVENTORY MODELS
One basic problem of
inventory management is to find
out the order quantity so that it
is most economical from overall operational point of view. Here that problem lies in minimizing the two conflicting costs, i.e. ordering cost and inventory carrying cost.
Inventory models help to find out the order quantity which minimizes the total costs(sum of ordering costs and inventory carrying costs).
This document discusses various inventory management concepts and techniques. It defines inventory as stored resources used to satisfy current or future needs, and identifies the main inventory types as raw materials, work in progress, and finished goods. It then discusses reasons for holding inventory, how to determine economic order quantities and reorder points, and assumptions of the economic order quantity and economic production quantity models. Finally, it briefly introduces different inventory classification systems like ABC analysis, HML classification, and XYZ classification that are used to categorize inventory items for better control and management.
Inventory management involves determining optimal inventory levels to balance costs and meet demand. There are three main types of inventory - raw materials, work in progress, and finished goods. The economic order quantity model helps determine how much to order by balancing ordering costs, carrying costs, and shortage costs. Maintaining appropriate inventory levels decouples processes, provides product variety for customers, and allows for quantity discounts.
The document discusses key concepts in inventory management including controls, planning models, costs, and classification. It aims to achieve customer service while keeping inventory costs reasonable. Economic order quantity (EOQ) and minimum/maximum models help determine order sizes by balancing holding and ordering costs. Safety stock hedges against uncertain demand or lead times. ABC classification divides inventory into categories based on annual value to focus controls.
This document discusses inventory management. It defines inventory as materials, parts, tools, supplies and work in progress that are maintained in storage. The objective of inventory management is to maintain optimal inventory levels to maximize profitability. It aims to order the right quantity from the right source at the right time and price. Effective inventory management tracks inventory levels and ensures a continuous supply of raw materials for production. It aims to minimize carrying costs while avoiding stock-out costs and maintaining customer service. Determining the optimum inventory level balances carrying, stock-out, and ordering costs.
This document discusses inventory management. It defines inventory as stock used in an organization, including raw materials, spare parts, and finished goods. It describes different types of inventories like movement, buffer, anticipation, and decoupling inventories. It also discusses inventory costs including purchase, ordering, carrying, and stockout costs. Finally, it covers economic order quantity models and different analysis methods for classifying inventory items.
This document provides an overview of warehouse and inventory management. It discusses the reasons for warehousing, including supporting customer service and supply continuity. The document outlines key warehouse operating principles like design, handling technology, and storage planning. It also describes common warehouse activities, types of warehouses, and factors to consider in warehouse location strategies. Finally, the document defines inventory management and discusses inventory classification, record keeping, categories of inventory like safety stock and cycle stock, and the goals of holding inventory.
This document discusses inventory management. It defines inventory as materials obtained in advance of need that are held until used or sold. There are different types of inventories like raw materials, work in progress, spare parts, and finished goods. Inventory valuation involves determining inventory quantities and assigning values. Holding inventory incurs costs like storage, ordering, shortages. The objectives of inventory control are to ensure smooth operations while minimizing costs and risks through techniques like determining economic order quantities and stock levels.
INVENTORY MODELS
One basic problem of
inventory management is to find
out the order quantity so that it
is most economical from overall operational point of view. Here that problem lies in minimizing the two conflicting costs, i.e. ordering cost and inventory carrying cost.
Inventory models help to find out the order quantity which minimizes the total costs(sum of ordering costs and inventory carrying costs).
This document discusses various inventory management concepts and techniques. It defines inventory as stored resources used to satisfy current or future needs, and identifies the main inventory types as raw materials, work in progress, and finished goods. It then discusses reasons for holding inventory, how to determine economic order quantities and reorder points, and assumptions of the economic order quantity and economic production quantity models. Finally, it briefly introduces different inventory classification systems like ABC analysis, HML classification, and XYZ classification that are used to categorize inventory items for better control and management.
Inventory management involves determining optimal inventory levels to balance costs and meet demand. There are three main types of inventory - raw materials, work in progress, and finished goods. The economic order quantity model helps determine how much to order by balancing ordering costs, carrying costs, and shortage costs. Maintaining appropriate inventory levels decouples processes, provides product variety for customers, and allows for quantity discounts.
The document discusses key concepts in inventory management including controls, planning models, costs, and classification. It aims to achieve customer service while keeping inventory costs reasonable. Economic order quantity (EOQ) and minimum/maximum models help determine order sizes by balancing holding and ordering costs. Safety stock hedges against uncertain demand or lead times. ABC classification divides inventory into categories based on annual value to focus controls.
This document discusses inventory management. It defines inventory as materials, parts, tools, supplies and work in progress that are maintained in storage. The objective of inventory management is to maintain optimal inventory levels to maximize profitability. It aims to order the right quantity from the right source at the right time and price. Effective inventory management tracks inventory levels and ensures a continuous supply of raw materials for production. It aims to minimize carrying costs while avoiding stock-out costs and maintaining customer service. Determining the optimum inventory level balances carrying, stock-out, and ordering costs.
This document discusses inventory management. It defines inventory as stock used in an organization, including raw materials, spare parts, and finished goods. It describes different types of inventories like movement, buffer, anticipation, and decoupling inventories. It also discusses inventory costs including purchase, ordering, carrying, and stockout costs. Finally, it covers economic order quantity models and different analysis methods for classifying inventory items.
This document provides an overview of warehouse and inventory management. It discusses the reasons for warehousing, including supporting customer service and supply continuity. The document outlines key warehouse operating principles like design, handling technology, and storage planning. It also describes common warehouse activities, types of warehouses, and factors to consider in warehouse location strategies. Finally, the document defines inventory management and discusses inventory classification, record keeping, categories of inventory like safety stock and cycle stock, and the goals of holding inventory.
The document discusses the economic order quantity (EOQ) model, which determines the optimal order quantity that minimizes total inventory costs. It defines EOQ as the order size that balances holding costs from carrying inventory with ordering costs. The document provides the EOQ formula and explains its underlying assumptions, as well as how to calculate EOQ and examples of its applications for organizations.
Inventory management plays a significant role in working capital management. It involves activities related to acquiring, storing, and using raw materials, work-in-progress, and finished goods. The objectives of inventory management are to maintain optimal levels of inventory to ensure smooth production and meet sales demands while minimizing investment costs. Effective inventory management requires balancing inventory levels to avoid under- or over-investment and using techniques like EOQ, reorder points, and ABC analysis to classify inventory items and determine optimal order quantities.
The document discusses inventory control model and concepts for effective supply chain management. It describes the types of materials needed in an industrial unit and importance of materials for plant operations. It then explains the inventory control model which operates based on minimum, maximum, reorder and average stock levels calculated using formulas. Factors influencing inventory control like consumption rate, order quantity, and lead time are also covered.
Warehouse Operations and Inventory Management Thomas Tanel
Companies that make the best use of the basic principles of planning and managing warehouse operations and inventory management have a competitive advantage. Organizations that lack warehouse strategic planning and inventory operational excellence lose profits, market share, cost advantages, and market leadership.
Traditional Supply Chain and Logistics channels are indeed changing. As organizations move from mass production and mass distribution to mass customization, creative approaches are needed in the management of warehousing and inventory. The challenge is always present, because different customers may demand different levels of service. Demand often cannot be forecasted, especially if one must deliver customized products or services exactly where the customer needs them.
Businesses today must understand that they are competing on the basis of time more than on any other factor. The rigors of supply chain management require that you take action to meet your customers’ demand for faster, more frequent, and more reliable deliveries. Your suppliers need to meet increasingly precise inbound schedules. Tomorrow’s customers are more likely to be in another country or continent than they are likely to be from across town, in another state, or in another province.
With a proven inventory management system and an A-B-C Analysis, you can transform your inventory into a proactive force that lowers your inventory investment, reduces carrying costs, boosts confidence in physical supply and distribution service levels, and increases customer and user satisfaction. From a storage and distribution perspective, you, as overseer of the supply management process, should also know how the warehousing layout design criteria and the space and storage schemes affect your material flow, service levels, computerization, and technology options.
This document discusses inventory management concepts. It defines independent and dependent demand and describes different types of inventories. It explains the functions of inventory including meeting demand, smoothing production, and protecting against stockouts. Key inventory terms are defined such as lead time, holding costs, and ordering costs. Different inventory models, counting systems, and classification approaches are outlined. The objective of inventory control is to balance customer service and inventory costs. Effective inventory management requires forecasting, lead time knowledge, and cost estimates.
Inventory management refers to the process of ordering, storing, using, and selling a company's inventory, including raw materials, components, and finished products. It aims to have the right amount of inventory to meet customer needs without overinvesting, and involves demand planning, determining optimal inventory levels, inventory tracking and control, and periodic counting.
This document discusses inventory models for independent demand, including the basic economic order quantity (EOQ) model and production order quantity model. It provides information on their objectives, assumptions, variables, and equations. It also defines reorder point and provides examples of calculating optimal order quantity, number of orders, time between orders, total annual costs, and reorder point based on given demand, costs, lead time, and other parameters.
Inventory models with two supply modelsMOHAMMED ASIF
We develop dynamic programming models for periodic inventory systems that allow for both regular and emergency orders to be placed periodically. There are two key cases - whether a fixed cost exists for emergency orders. If emergency ordering is possible, there is a critical inventory level such that emergency orders are placed if inventory falls below this level at review times. We also provide simple procedures to compute optimal policy parameters - the optimal order-up-to level solves a myopic cost function. Thus, the optimal policies are easy to implement.
The Master Production Schedule (MPS) states the requirements for individual end items by date and quantity. It breaks down the production plan into product families, promotes valid order promises, provides communication between sales and operations, and helps control inventory levels and resource availability. The MPS follows three key rules: Rule C which balances projected inventory with customer demand, Rule F which focuses production on forecasted demand, and the Rule of Look Ahead Duration which determines how far into the future the MPS plans production.
Material requirements planning (MRP) is a production planning, scheduling, and inventory control system used to manage manufacturing processes. Most MRP systems are software-based, but it is possible to conduct MRP by hand as well. ... Plan manufacturing activities, delivery schedules and purchasing activities.
Inventory/Material Control and management : Cost AccountingGuru Aarat
This presentation would help understand what is inventory and inventory control and management . It would also help understand various terms necessary for material controlling such as EOQ, Minimum stock , Maximum stock, buffer stock , re order level etc.
After learning about the various terms ..the techniques of material control would be discussed and presented with suitable graphs and point wise explanations
This document discusses inventory management and inventory models. It describes key factors that influence inventory decisions like setup costs, purchase price, holding costs, shortage costs, demand patterns, ordering cycles, lead times, replenishment, and time horizons. Common inventory models are described, including the basic model with constant demand, instant replenishment and no shortages. The economic order quantity (EOQ) formula is derived and an example problem is worked through.
This document provides an overview of inventory management techniques. It begins with defining inventory and its objectives. It then covers various inventory analysis methods like ABC analysis, which categorizes inventory items into A, B and C based on their value and demand. Other techniques discussed include FSN analysis to classify items based on consumption pattern, and make or buy decision analysis to determine whether to manufacture or outsource items. The document aims to explain key inventory management strategies and analysis methods used by companies.
This document provides an overview of inventory management concepts. It defines inventory and inventory systems, discusses the objectives and costs of holding inventory, and describes several inventory models for determining optimal order quantities and reorder points. These include single-period and multi-period models like the economic order quantity and fixed-time period models. It also covers miscellaneous inventory systems, classification techniques, and the importance of inventory accuracy.
The document discusses material accounting and inventory systems. It defines stores to include raw materials, consumables, tools, patterns, maintenance materials, work in progress, and finished goods. It describes the objectives of storage as ensuring uninterrupted supply, preventing overstocking and understocking, effective and economic use of space, and minimizing costs. The functions of the stores department are also summarized, which include issuing purchase requisitions, receiving and storing materials, and maintaining accurate records.
The document discusses the economic order quantity (EOQ) model, which is used to determine the optimal order quantity that minimizes total costs of ordering and holding inventory. It assumes known constant demand, lead times, instant receipt of orders, no quantity discounts or stockouts. The EOQ formula balances ordering costs and holding costs to find the quantity that results in the lowest total costs. An example calculates the EOQ of 80 coffee makers for a shop ordering 1000 per year with order and holding costs specified.
MRP (Material Requirements Planning) is a computerized inventory control and production planning system that determines what materials and components are needed for production and when, based on orders and forecasts. It schedules the production of all items using an MRP matrix to track inventory levels and help manage other aspects of business like purchasing, production, and shipping. The system inputs include a product structure file, master production schedule, and inventory master file. The outputs are manufacturing orders, purchasing orders, and various reports.
Aggregate planning involves determining resource capacity over an intermediate time horizon to meet product demand. It aims to establish a company-wide plan for allocating resources through various demand management strategies, including adjusting capacity, production levels, workforce, and inventory. Quantitative techniques like linear programming can help optimize solutions by minimizing costs associated with hiring, firing, production and inventory carrying under demand constraints.
This document discusses material control and inventory management. It defines key terms like materials, inventory, and different stock levels. It describes the objectives and operations of material control like purchasing, inspection, and storage of materials. Methods to determine economic order quantity, set stock levels like reorder point, minimum and maximum levels are presented. Documentation for material procurement, storage, and issuance are covered. Pricing methods for materials issued like FIFO, LIFO, simple average and weighted average are also summarized.
The document discusses inventory management and various inventory systems. It defines inventory and different inventory types like raw materials, work in process, and finished goods. It describes the costs of carrying inventory and different inventory measurement methods. It also summarizes economic order quantity models, reorder points, periodic review systems, ABC classification, and anticipatory versus response-based inventory control systems. The goal of inventory management is to balance inventory levels and costs with customer service levels.
The document discusses inventory management concepts including definitions of inventory and inventory systems. It describes different types of inventory like raw materials, work in process, and finished goods. It also discusses reasons for holding inventory, costs associated with inventory like holding and ordering costs, and models for determining optimal order quantities and reorder points. The document provides an overview of key issues in inventory management systems.
The document discusses the economic order quantity (EOQ) model, which determines the optimal order quantity that minimizes total inventory costs. It defines EOQ as the order size that balances holding costs from carrying inventory with ordering costs. The document provides the EOQ formula and explains its underlying assumptions, as well as how to calculate EOQ and examples of its applications for organizations.
Inventory management plays a significant role in working capital management. It involves activities related to acquiring, storing, and using raw materials, work-in-progress, and finished goods. The objectives of inventory management are to maintain optimal levels of inventory to ensure smooth production and meet sales demands while minimizing investment costs. Effective inventory management requires balancing inventory levels to avoid under- or over-investment and using techniques like EOQ, reorder points, and ABC analysis to classify inventory items and determine optimal order quantities.
The document discusses inventory control model and concepts for effective supply chain management. It describes the types of materials needed in an industrial unit and importance of materials for plant operations. It then explains the inventory control model which operates based on minimum, maximum, reorder and average stock levels calculated using formulas. Factors influencing inventory control like consumption rate, order quantity, and lead time are also covered.
Warehouse Operations and Inventory Management Thomas Tanel
Companies that make the best use of the basic principles of planning and managing warehouse operations and inventory management have a competitive advantage. Organizations that lack warehouse strategic planning and inventory operational excellence lose profits, market share, cost advantages, and market leadership.
Traditional Supply Chain and Logistics channels are indeed changing. As organizations move from mass production and mass distribution to mass customization, creative approaches are needed in the management of warehousing and inventory. The challenge is always present, because different customers may demand different levels of service. Demand often cannot be forecasted, especially if one must deliver customized products or services exactly where the customer needs them.
Businesses today must understand that they are competing on the basis of time more than on any other factor. The rigors of supply chain management require that you take action to meet your customers’ demand for faster, more frequent, and more reliable deliveries. Your suppliers need to meet increasingly precise inbound schedules. Tomorrow’s customers are more likely to be in another country or continent than they are likely to be from across town, in another state, or in another province.
With a proven inventory management system and an A-B-C Analysis, you can transform your inventory into a proactive force that lowers your inventory investment, reduces carrying costs, boosts confidence in physical supply and distribution service levels, and increases customer and user satisfaction. From a storage and distribution perspective, you, as overseer of the supply management process, should also know how the warehousing layout design criteria and the space and storage schemes affect your material flow, service levels, computerization, and technology options.
This document discusses inventory management concepts. It defines independent and dependent demand and describes different types of inventories. It explains the functions of inventory including meeting demand, smoothing production, and protecting against stockouts. Key inventory terms are defined such as lead time, holding costs, and ordering costs. Different inventory models, counting systems, and classification approaches are outlined. The objective of inventory control is to balance customer service and inventory costs. Effective inventory management requires forecasting, lead time knowledge, and cost estimates.
Inventory management refers to the process of ordering, storing, using, and selling a company's inventory, including raw materials, components, and finished products. It aims to have the right amount of inventory to meet customer needs without overinvesting, and involves demand planning, determining optimal inventory levels, inventory tracking and control, and periodic counting.
This document discusses inventory models for independent demand, including the basic economic order quantity (EOQ) model and production order quantity model. It provides information on their objectives, assumptions, variables, and equations. It also defines reorder point and provides examples of calculating optimal order quantity, number of orders, time between orders, total annual costs, and reorder point based on given demand, costs, lead time, and other parameters.
Inventory models with two supply modelsMOHAMMED ASIF
We develop dynamic programming models for periodic inventory systems that allow for both regular and emergency orders to be placed periodically. There are two key cases - whether a fixed cost exists for emergency orders. If emergency ordering is possible, there is a critical inventory level such that emergency orders are placed if inventory falls below this level at review times. We also provide simple procedures to compute optimal policy parameters - the optimal order-up-to level solves a myopic cost function. Thus, the optimal policies are easy to implement.
The Master Production Schedule (MPS) states the requirements for individual end items by date and quantity. It breaks down the production plan into product families, promotes valid order promises, provides communication between sales and operations, and helps control inventory levels and resource availability. The MPS follows three key rules: Rule C which balances projected inventory with customer demand, Rule F which focuses production on forecasted demand, and the Rule of Look Ahead Duration which determines how far into the future the MPS plans production.
Material requirements planning (MRP) is a production planning, scheduling, and inventory control system used to manage manufacturing processes. Most MRP systems are software-based, but it is possible to conduct MRP by hand as well. ... Plan manufacturing activities, delivery schedules and purchasing activities.
Inventory/Material Control and management : Cost AccountingGuru Aarat
This presentation would help understand what is inventory and inventory control and management . It would also help understand various terms necessary for material controlling such as EOQ, Minimum stock , Maximum stock, buffer stock , re order level etc.
After learning about the various terms ..the techniques of material control would be discussed and presented with suitable graphs and point wise explanations
This document discusses inventory management and inventory models. It describes key factors that influence inventory decisions like setup costs, purchase price, holding costs, shortage costs, demand patterns, ordering cycles, lead times, replenishment, and time horizons. Common inventory models are described, including the basic model with constant demand, instant replenishment and no shortages. The economic order quantity (EOQ) formula is derived and an example problem is worked through.
This document provides an overview of inventory management techniques. It begins with defining inventory and its objectives. It then covers various inventory analysis methods like ABC analysis, which categorizes inventory items into A, B and C based on their value and demand. Other techniques discussed include FSN analysis to classify items based on consumption pattern, and make or buy decision analysis to determine whether to manufacture or outsource items. The document aims to explain key inventory management strategies and analysis methods used by companies.
This document provides an overview of inventory management concepts. It defines inventory and inventory systems, discusses the objectives and costs of holding inventory, and describes several inventory models for determining optimal order quantities and reorder points. These include single-period and multi-period models like the economic order quantity and fixed-time period models. It also covers miscellaneous inventory systems, classification techniques, and the importance of inventory accuracy.
The document discusses material accounting and inventory systems. It defines stores to include raw materials, consumables, tools, patterns, maintenance materials, work in progress, and finished goods. It describes the objectives of storage as ensuring uninterrupted supply, preventing overstocking and understocking, effective and economic use of space, and minimizing costs. The functions of the stores department are also summarized, which include issuing purchase requisitions, receiving and storing materials, and maintaining accurate records.
The document discusses the economic order quantity (EOQ) model, which is used to determine the optimal order quantity that minimizes total costs of ordering and holding inventory. It assumes known constant demand, lead times, instant receipt of orders, no quantity discounts or stockouts. The EOQ formula balances ordering costs and holding costs to find the quantity that results in the lowest total costs. An example calculates the EOQ of 80 coffee makers for a shop ordering 1000 per year with order and holding costs specified.
MRP (Material Requirements Planning) is a computerized inventory control and production planning system that determines what materials and components are needed for production and when, based on orders and forecasts. It schedules the production of all items using an MRP matrix to track inventory levels and help manage other aspects of business like purchasing, production, and shipping. The system inputs include a product structure file, master production schedule, and inventory master file. The outputs are manufacturing orders, purchasing orders, and various reports.
Aggregate planning involves determining resource capacity over an intermediate time horizon to meet product demand. It aims to establish a company-wide plan for allocating resources through various demand management strategies, including adjusting capacity, production levels, workforce, and inventory. Quantitative techniques like linear programming can help optimize solutions by minimizing costs associated with hiring, firing, production and inventory carrying under demand constraints.
This document discusses material control and inventory management. It defines key terms like materials, inventory, and different stock levels. It describes the objectives and operations of material control like purchasing, inspection, and storage of materials. Methods to determine economic order quantity, set stock levels like reorder point, minimum and maximum levels are presented. Documentation for material procurement, storage, and issuance are covered. Pricing methods for materials issued like FIFO, LIFO, simple average and weighted average are also summarized.
The document discusses inventory management and various inventory systems. It defines inventory and different inventory types like raw materials, work in process, and finished goods. It describes the costs of carrying inventory and different inventory measurement methods. It also summarizes economic order quantity models, reorder points, periodic review systems, ABC classification, and anticipatory versus response-based inventory control systems. The goal of inventory management is to balance inventory levels and costs with customer service levels.
The document discusses inventory management concepts including definitions of inventory and inventory systems. It describes different types of inventory like raw materials, work in process, and finished goods. It also discusses reasons for holding inventory, costs associated with inventory like holding and ordering costs, and models for determining optimal order quantities and reorder points. The document provides an overview of key issues in inventory management systems.
The document discusses inventory management concepts including definitions of inventory and inventory systems. It describes different types of inventory like raw materials, work in process, and finished goods. It also discusses reasons for holding inventory, costs associated with inventory like holding and ordering costs, and models for determining optimal order quantities and reorder points. The document provides an overview of key issues in inventory management systems.
The document discusses key concepts related to inventory management. It defines inventory and inventory systems, and describes different types of inventory like raw materials, work in process, and finished goods. It also discusses reasons for holding inventory, costs associated with inventory like holding and ordering costs, and methods for measuring and controlling inventory levels like economic order quantity and reorder point models. The document provides an overview of inventory management fundamentals.
The document discusses inventory management. It defines inventory and different types of inventory like raw materials, works-in-process, and finished goods. It also discusses reasons for holding inventory, different inventory measures, costs associated with inventory, and models for managing inventory like economic order quantity and reorder point.
The document discusses inventory management. It defines inventory and different types of inventory like raw materials, works-in-process, and finished goods. It also discusses reasons for holding inventory, different inventory measures, costs associated with inventory, and models for managing inventory like economic order quantity and reorder point.
The document discusses inventory management concepts including definitions of inventory, inventory systems, types of inventory positions in the supply chain, reasons for holding inventory, and how inventory can add value through quality, speed, flexibility and cost. It also covers topics like designing inventory management systems, measuring inventory, balancing inventory levels, models for inventory management including economic order quantity and reorder point models, and classifying inventory using ABC analysis.
Inventory Management and Prevention of Stock-out_23082022.pptxNagaraju94925
The document discusses inventory management and prevention of stock-outs. It provides definitions and calculations for key inventory terms like working stock, buffer stock, safety stock, reorder level, and maximum order level.
The cyclic or fixed order method is used by larger stores like hospital main stores and district drug stores. Orders are placed at fixed periodic intervals to maintain stock at the desired maximum level. Smaller departmental stores like labor rooms use a two bin system, where orders are placed when stock reaches the predetermined reorder level.
Formulas are given to calculate values like working stock, buffer stock, safety stock, reorder level, and maximum order level based on factors like average daily consumption, indent cycle, maximum and average lead times.
Inventory includes raw materials, parts, work-in-progress, and finished goods held by a company. It represents a large corporate asset and investment. Effective inventory management can boost sales, reduce costs, and increase profits. Companies must balance the costs of holding excess inventory with the costs and lost sales from stockouts. Inventory models help determine optimal order quantities and reorder points while accounting for factors like demand variability, lead times, and desired service levels.
Inventory includes raw materials, parts, work-in-process, and finished goods held in the supply chain. Managing inventory well can increase sales, reduce costs, and boost profits. At the firm level, poor inventory management led companies like Solectron and Palm to suffer large losses from excess inventory during downturns. The economic order quantity (EOQ) model helps determine the optimal order size by balancing ordering and holding costs. Safety stock is added to the reorder point to account for uncertain demand and achieve a target service level.
This document discusses inventory management. It defines inventory and describes the variables involved in inventory problems including controlled variables like order quantity and timing, and uncontrolled variables like costs. It describes the objectives of inventory management as maintaining optimal inventory levels to maximize profitability. Different types of inventories like raw materials, work in progress, and finished goods are explained. The functions and importance of inventory management are provided along with methods like periodic review and fixed order quantity systems. The economic order quantity model and assumptions are outlined.
Inventory control models help businesses determine optimal inventory levels and manage ordering processes. There are three main models: Economic Order Quantity (EOQ) calculates optimal order sizes; ABC Analysis categorizes inventory importance; and Inventory Production Quantity determines batch order sizes. Additional models include Reorder Point, which triggers replenishment orders, and four types of inventory - raw materials, unfinished products, in-transit stock, and cycle inventory used for regular demand.
Inventory management and risk pooling are important concepts in supply chain management. General Motors in 1984 had a large logistic network with high inventory levels and transportation costs. Effective inventory management and risk pooling strategies can help companies reduce costs and improve customer service by reducing inventory levels while maintaining the same level of service or improving service with the same inventory. These strategies work best when demands across different locations are negatively correlated as it reduces overall demand variability.
The document discusses various inventory management concepts including types of inventory, inventory costs, inventory control systems, and ABC classification. It describes the economic order quantity (EOQ) model, which helps determine optimal order quantities to minimize total inventory costs given annual demand, ordering costs, and holding costs. The reorder point indicates when to place a new order based on daily demand, lead time, and a safety stock to protect against variability in demand.
Inventory consists of raw materials, work-in-progress, spare parts, consumables, and finished goods. Common techniques for inventory control include determining various stock levels, economic order quantity, ABC analysis, and perpetual inventory systems. Stock levels include reorder level, maximum level, minimum level, average level, and danger level, which are calculated based on factors like consumption rates and lead times. Economic order quantity is the optimal order size that minimizes total ordering and carrying costs. ABC analysis classifies inventory items into A, B, and C categories based on their monetary value and consumption, with more attention given to A items.
Buffer Stock and Safety Stock are often used interchangeably. However, this often creates confusion. Buffer Stock and Safety Stock are different from each other. Buffer stock distinguishes it from Safety stock. Buffer Stock protects the Provider from the Supplier when there is delay in receiving supply. On the other hand, the Safety Stock protects the Provider from Consumer in probabilities like an abrupt change in the demand for a particular product or uncontrollable delay in the delivery of the material from supplier
The document discusses inventory management techniques. It describes the purposes of holding inventory as transaction motive, precaution motive, and speculative motive. It also discusses the risks and costs of holding inventory. The objectives of inventory management are to ensure continuous supply and avoid overstocking/understocking while maintaining optimal investment levels. Techniques discussed include determining minimum, maximum, reorder, and danger stock levels. It also discusses economic order quantity and receivables management concepts.
1. Inventory management involves determining appropriate inventory levels and replenishment policies to balance inventory holding costs, ordering costs, and the need to meet customer demand.
2. Key aspects of inventory management include classifying inventory items, determining economic order quantities, setting reorder points, and using periodic or continuous review systems.
3. The goals of effective inventory management are to provide good customer service while minimizing total inventory costs.
The document discusses inventory management. It defines inventory as items kept by an organization to meet demand. The purpose of inventory management is to determine how much inventory to keep and when to replenish it. Types of inventory include raw materials, work in progress, finished goods, and replacement parts. Inventory serves functions like meeting demand, production smoothing, and protecting against stock-outs. The objective is to balance customer service and inventory costs. Effective management requires tracking inventory levels, forecasting demand, and estimating costs of ordering, carrying, and shortages.
Inventory Optimization: Action Plan for Inventory OptimizationMauly Chandra
The objective is to suggest actionable steps for inventory optimization for Manufacturing SMEs.
It covers aspects such as
- Basics of Inventory Optimization
- 3 Pillars of Inventory Optimization
- Demand Planning - 3 methods of Demand Planning
- Supply Sources - Basics & GOLF
- Inventory Control
- Key Factors to consider in Inventory Control
- Re-Order Point
- Re-Order Quantity
- Max Stock Level
- Min / Safety Stock Level
- How to calculate the Values in different Demand Planning Methods
- Inventory Optimization Examples in each of the Demand Planning Methods
This presentation gives a clear and concise description of joins in sql and several types of sql joins.
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This document provides instructions for writing a review of one chapter from an auxiliary reading. The review must be 5-6 pages long with specific formatting and include: an introduction with the chapter's thesis, discussion of 3-4 main points from the chapter, background on the author, a personal evaluation, and a conclusion assessing if the author accomplished their purpose. The review must be the student's own writing with no more than two brief quotes cited from the chapter.
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Understanding Inductive Bias in Machine LearningSUTEJAS
This presentation explores the concept of inductive bias in machine learning. It explains how algorithms come with built-in assumptions and preferences that guide the learning process. You'll learn about the different types of inductive bias and how they can impact the performance and generalizability of machine learning models.
The presentation also covers the positive and negative aspects of inductive bias, along with strategies for mitigating potential drawbacks. We'll explore examples of how bias manifests in algorithms like neural networks and decision trees.
By understanding inductive bias, you can gain valuable insights into how machine learning models work and make informed decisions when building and deploying them.
Harnessing WebAssembly for Real-time Stateless Streaming PipelinesChristina Lin
Traditionally, dealing with real-time data pipelines has involved significant overhead, even for straightforward tasks like data transformation or masking. However, in this talk, we’ll venture into the dynamic realm of WebAssembly (WASM) and discover how it can revolutionize the creation of stateless streaming pipelines within a Kafka (Redpanda) broker. These pipelines are adept at managing low-latency, high-data-volume scenarios.
6th International Conference on Machine Learning & Applications (CMLA 2024)ClaraZara1
6th International Conference on Machine Learning & Applications (CMLA 2024) will provide an excellent international forum for sharing knowledge and results in theory, methodology and applications of on Machine Learning & Applications.
Advanced control scheme of doubly fed induction generator for wind turbine us...IJECEIAES
This paper describes a speed control device for generating electrical energy on an electricity network based on the doubly fed induction generator (DFIG) used for wind power conversion systems. At first, a double-fed induction generator model was constructed. A control law is formulated to govern the flow of energy between the stator of a DFIG and the energy network using three types of controllers: proportional integral (PI), sliding mode controller (SMC) and second order sliding mode controller (SOSMC). Their different results in terms of power reference tracking, reaction to unexpected speed fluctuations, sensitivity to perturbations, and resilience against machine parameter alterations are compared. MATLAB/Simulink was used to conduct the simulations for the preceding study. Multiple simulations have shown very satisfying results, and the investigations demonstrate the efficacy and power-enhancing capabilities of the suggested control system.
Presentation of IEEE Slovenia CIS (Computational Intelligence Society) Chapte...University of Maribor
Slides from talk presenting:
Aleš Zamuda: Presentation of IEEE Slovenia CIS (Computational Intelligence Society) Chapter and Networking.
Presentation at IcETRAN 2024 session:
"Inter-Society Networking Panel GRSS/MTT-S/CIS
Panel Session: Promoting Connection and Cooperation"
IEEE Slovenia GRSS
IEEE Serbia and Montenegro MTT-S
IEEE Slovenia CIS
11TH INTERNATIONAL CONFERENCE ON ELECTRICAL, ELECTRONIC AND COMPUTING ENGINEERING
3-6 June 2024, Niš, Serbia
DEEP LEARNING FOR SMART GRID INTRUSION DETECTION: A HYBRID CNN-LSTM-BASED MODELgerogepatton
As digital technology becomes more deeply embedded in power systems, protecting the communication
networks of Smart Grids (SG) has emerged as a critical concern. Distributed Network Protocol 3 (DNP3)
represents a multi-tiered application layer protocol extensively utilized in Supervisory Control and Data
Acquisition (SCADA)-based smart grids to facilitate real-time data gathering and control functionalities.
Robust Intrusion Detection Systems (IDS) are necessary for early threat detection and mitigation because
of the interconnection of these networks, which makes them vulnerable to a variety of cyberattacks. To
solve this issue, this paper develops a hybrid Deep Learning (DL) model specifically designed for intrusion
detection in smart grids. The proposed approach is a combination of the Convolutional Neural Network
(CNN) and the Long-Short-Term Memory algorithms (LSTM). We employed a recent intrusion detection
dataset (DNP3), which focuses on unauthorized commands and Denial of Service (DoS) cyberattacks, to
train and test our model. The results of our experiments show that our CNN-LSTM method is much better
at finding smart grid intrusions than other deep learning algorithms used for classification. In addition,
our proposed approach improves accuracy, precision, recall, and F1 score, achieving a high detection
accuracy rate of 99.50%.
2. INVENTORY MODEL
Inventory model is a mathematical model that helps business
in determining the optimum level of inventories that should
be maintained in a production process, managing frequency
of ordering, deciding on quantity of goods or raw materials to
be stored, tracking flow of supply of raw materials and goods
to provide uninterrupted service to customers without any
delay in delivery.
Ankit Rai
3. There are two types of Inventory model widely used in
business.
Fixed Reorder Quantity System
Fixed Reorder Period System.
Ankit Rai
4. Fixed Recorder Quantity System
Fixed Reorder Quantity System is an Inventory Model,
where an alarm is raised immediately when the
inventory level drops below a fixed quantity and new
orders are raised to replenish the inventory to an
optimum level based on the demand.
The point at which the inventory is ordered for
replenishment is termed as Reorder Point.
The inventory quantity at Reorder Point is termed
as Reorder Level and the quantity of new inventory
ordered is referred as Order Quantity.
Ankit Rai
5. Average Demand (DAv): It is the average number of
order requests made per day.
Average Lead Time (TL): The time required to
manufacture goods or product.
Average Lead Time Demand (DL): Average number of
orders requested during the Lead Time.
Average Lead Time Demand (DL)
= Average Demand (DAv) x Average Lead Time (TL)
Ankit Rai
6. Safety Stock (S): It is the extra stock that is always maintained
to mitigate any future risks arising due to stock-outs because of
shortfall of raw materials or supply, breakdown in machine or
plant, accidents, natural calamity or disaster, labour strike or
any other crisis that may stall the production process.
The quantity of safety stock is often derived by analysing
historical data and is set to an optimized level by evaluating
carefully the current cost of inventory and losses that may be
incurred due to future risk.
Ankit Rai
7. Reorder Level
Reorder level is the inventory level, at which an alarm is triggered
immediately to replenish that particular inventory stock. Reorder
level is defined, keeping into consideration the Safety Stock to
avoid any stock-out and Average Lead Time Demand because
even after raising the alarm, it would take one complete process
cycle (Lead Time) till the new inventories arrive to replenish the
existing inventory.
Reorder Level (RL)
= Safety Stock (S) + Average Lead Time Demand (DL)
Ankit Rai
8. Maximum Level (LMax) = Safety Stock (S) + Order Quantity (O)
Order Quantity (O): Order quantity is the Demand (Order requests)
that needs to be delivered to the customer.
Minimum Level: At least Safety Stock has to be always maintained
to avoid any future stock- outs as per the standard practices of
inventory management.
Minimum Level (LMin) = Safety Stock (S)
Maximum Level: The maximum level that can be kept in stock is
safety stock and the demand (the quantity ordered).
Ankit Rai
10. Example: The order quantity of an Item is 600 Units. The
safety Stock is 200 Units. The Average Lead Time is 5 Days
and average consumption per days is 40 units.
Order Quantity (O) = 600 Units
Safety Stock (S) = 200 Units
Average Lead Time (TL) = 5 Days
Average Demand ( DAv ) = 40 Units
Average Lead Time Demand (DL) = Demand (DAv) X Lead Time (TL)
= 40 x 5 = 200 Units
Reorder Level (RL) = Safety Stock (S) + Average Lead Time Demand (DL)
= 200 + 200 = 400 Units
Minimum Level (LMin) = Safety Stock (S) = 200 Units
Maximum Level (LMax) = Safety Stock (S) + Order Quantity (O)
= 200 + 600 = 800 Units
Ankit Rai
11. Fixed Order Period System
Fixed Reorder Period System is an Inventory Model of
managing inventories, where an alarm is raised after
every fixed period of time and orders are raised to
replenish the inventory to an optimum level based on the
demand.
In this case replenishment of inventory is a continuous
process done after every fixed interval of time.
Ankit Rai
12. Regular Intervals (R): Regular Interval is the fixed time
interval at the end of which the inventories would be
reviewed and orders would be raised to replenish the
inventory
Inventory on Hand (It): Inventory on hand is the Inventory
level measured at any given point of time.
Maximum Level (M): It is the maximum level of inventory
allowed as per the production guidelines. The maximum
level is derived by analysing historical data.
Ankit Rai
13. Order Quantity: In this system, inventory is reviewed at
regular intervals (R), inventory on hand (It) is noted at the
time of review and order quantity is placed for a quantity
of (M) – (It).
Order Quantity (O) = (M) – (It)
Ankit Rai
15. Example: Inventory is replenished at every regular interval of 5
days. The maximum allowable inventory is 800 Units. The
inventory reviewed on Day-5, Day-10, Day -15 and Day -20 were
387 Units, 201 Units, 498 Units and 127 Units respectively.
Regular Intervals (R) = 5 Days
Maximum Level (M) = 800 Units
Inventory on Hand: I5 = 387 Units, I10 = 201 Units, I15 = 498
Units and I20 = 127 Units
Order Quantity (O) = (M) – (It).
Order Quantity (O5) = 800 – 387 = 413 Units
Order Quantity (O10) = 800 – 201 = 599 Units
Order Quantity (O15) = 800 – 498 = 302 Units
Order Quantity (O20) = 800 – 127 = 673 Units
Ankit Rai