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Study with Quizlet and memorize flashcards containing terms like Independent demand inventory models can be used to determine: A. When to buy and how much to buy. B. How to reduce stockouts.
If beginning inventory is $1,000,000, ending inventory is $1,400,000, sales are $10,000,000, and anticipated sales are $50,000 per day, what is the days of supply? 28 days $1,400,000/$50,000 = 28 Independent demand inventory models can be used to determine:
Independent demand inventory models can be used to determine: Stock levels for regular and one-time buys. Safety stock levels. When to buy and how much to buy. All of these selections.
Inventory Models for Independent Demand. In this section, we introduce three inventory models that address two important questions: when to order and how much to order. These independent demand models are: Basic economic order quantity (EOQ) model. Production order quantity model. Quantity discount model. The Basic Economic Order Quantity (EOQ ...
Learn the difference between independent demand and dependant demand inventories, and how they are managed differently. Independent demand inventories are based on customer orders, forecasts and historical data, while dependant demand inventories are based on the demand for finished goods.
An item has independent demand when we can’t control it or tie it directly to another item’s demand; An item has dependent demand when the demand for an item is controlled directly, or tied to the production of something else. Independent demand and dependent demand items require very different solutions.
INDEPENDENT DEMAND INVENTORY MANAGEMENT 7. LEARNING OBJECTIVES. After completing this chapter, you should be able to: 7.1 Describe the types of inventory. 7.2 Explain the functions of inventory. 7.3 Interpret the costs, risks, and value of inventory. 7.4 Calculate the EOQ and reorder point under various demand and lead time conditions.
Independent Demand Models • Non Linear (Chemical Industry - take or pay) • Deterministic Simulation (make to stock - lumpy demand) • Mathematical Programming (family structure - near optimum) • Heuristic (make to stock - sequence independent) • Heuristic (Make to stock - sequence dependent)
Learn the difference between independent demand and dependent demand inventory items, and how to manage them with periodic review, perpetual review, and EOQ systems. Find out how to calculate reorder point and safety stock for different service levels and lead times.
Discuss the basic workings of two classic independent demand inventory models: Period review. Perpetual review systems. Calculate the economic order quantity (EOQ) and reorder point (ROP) for a perpetual review system. Tutorial Outline. Functions & drivers of inventory