The four categories of inventory are:

Inventory Terminology and Techniques

1.The four categories of inventory are:

 

Hint: See the Overview: Managing Inventories section of the week 1 PowerPoint deck (page 9-16)

A. Stock Outs, ABC, Economic Order Quantity, and Finished Goods
B. Finished Goods, Assembly Process, Maintenance Parts & Supplies, Raw Materials.
C. Work-in-Process, Maintenance parts and Supplies, Finished Goods, and Raw Materials
D. Equipment on Manufacturing Line, Work-in-Process, Maintenance Parts and Supplies, Raw Materials

2.The inventory dilemma is the balance between customer desires and minimizing the cost of inventory.

 

Hint: See the Inventory Basics section of your lecture.

True
False

3. Assume your business uses the Min/Max Inventory Reorder Strategy.  In other words, inventory is ordered when a minimum quantity is reached.  You stock widgets for sale.  The maximum number of widgets is 1000.  The minimum is 200.  The lead-time is one week.  The cost of the widget is $10.00.

Today you discovered that a large shipment reduced your inventory to 200.  How many widgets do you order?

Hint: See page 34-35 in the week 1 PowerPoint

______________.

4.There are multiple strategies for reordering inventory.  The following statements are all related to Inventory Reorder Strategies. (Hint: See page 24-30 of the PowerPoint file in Week 1)

1. When using the Order Point Strategy, the quantity ordered is based on  __________

2. Inventory is ordered when a __________  quantity is reached that brings it back to the  ___________ .

3. ____________ says that you order the number of units that sold as they sell.  This requires accurate forecasts and a robust supply chain.

5.How do you decide to reorder your inventory?

Order Point         [ Choose ]             The time between placing an order and delivery of the goods.             The time between placing one set of orders and the next set of orders .            Inventory held as a buffer against variability in demand, delivery time, or other unforeseen actions .            Inventory level used to trigger a reorder

Safety Stock   [ Choose ]             The time between placing an order and delivery of the goods .            The time between placing one set of orders and the next set of orders .            Inventory held as a buffer against variability in demand, delivery time, or other unforeseen actions.             Inventory level used to trigger a reorder

Lead Time         [ Choose ]             The time between placing an order and delivery of the goods .            The time between placing one set of orders and the next set of orders.             Inventory held as a buffer against variability in demand, delivery time, or other unforeseen actions.             Inventory level used to trigger a reorder

Order Cycle Time      [ Choose ]             The time between placing an order and delivery of the goods.             The time between placing one set of orders and the next set of orders.             Inventory held as a buffer against variability in demand, delivery time, or other unforeseen actions .            Inventory level used to trigger a reorder .

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