mgt 2070
Chapter 12 Q1-18 not 2.6.12 pg496
1. Raw Material inventory, work in process inventory, maintenance/repair/operating supply (MRO) inventory, and finished goods inventory
3. Better forecasting, physical control, supplier reliability can result from appropriate inventory management policies abc guides development of those policies, idea is to establish policies that focuses resources on few critical inventory parts and not the many trivial ones222
4. Holding costs, ordering costs, setup costs. Setup time
5. Demand for item is known; lead-time is consistent and known, receipt of inventory is instantaneous and complete, quantity discounts are not possible, only variable costs are setup or ordering cost and holding or carrying cost, and stock outs or shortages can be completely avoided
7. Because in EOQ it assumes that there are no other variable costs and the product price is constant. Because for a quality discount it takes into consideration the price of the product because it is giving a discount of buying large volumes so it can still cover the cost of buying the product, as discount quantity goes up, the product cost goes down.
8. It eliminates the shutdown and interruption of production necessary for annual physical inventories, eliminates annual inventory adjustments, trained personnel audit the accuracy of inventory, allows the cause of the errors to be identified and remedial action to be taken, maintains accurate inventory records
9.A reduction in setup cost will reduce the total cost curve, also reduces the optimal order quantity.
10. If they aren’t below then they aren’t in the range and it wont be relevant and outside the EOQ.
11. Service level is the complement of the probability of a stock out
13Fixed- quantity (Q) is an ordering system with the same order amount each time. Fixed-Period (P) is a system in which inventory orders are made at regular time intervals.
14. By robust we mean that it gives satisfactory answers even with
1. Raw Material inventory, work in process inventory, maintenance/repair/operating supply (MRO) inventory, and finished goods inventory
3. Better forecasting, physical control, supplier reliability can result from appropriate inventory management policies abc guides development of those policies, idea is to establish policies that focuses resources on few critical inventory parts and not the many trivial ones222
4. Holding costs, ordering costs, setup costs. Setup time
5. Demand for item is known; lead-time is consistent and known, receipt of inventory is instantaneous and complete, quantity discounts are not possible, only variable costs are setup or ordering cost and holding or carrying cost, and stock outs or shortages can be completely avoided
7. Because in EOQ it assumes that there are no other variable costs and the product price is constant. Because for a quality discount it takes into consideration the price of the product because it is giving a discount of buying large volumes so it can still cover the cost of buying the product, as discount quantity goes up, the product cost goes down.
8. It eliminates the shutdown and interruption of production necessary for annual physical inventories, eliminates annual inventory adjustments, trained personnel audit the accuracy of inventory, allows the cause of the errors to be identified and remedial action to be taken, maintains accurate inventory records
9.A reduction in setup cost will reduce the total cost curve, also reduces the optimal order quantity.
10. If they aren’t below then they aren’t in the range and it wont be relevant and outside the EOQ.
11. Service level is the complement of the probability of a stock out
13Fixed- quantity (Q) is an ordering system with the same order amount each time. Fixed-Period (P) is a system in which inventory orders are made at regular time intervals.
14. By robust we mean that it gives satisfactory answers even with