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Inventory and Inventory Management (1) What Is Inventory ? Those stocks or items used to support production ( raw materials and work-in-process items), supporting activities (maintenance, repair, and operating suppliers ), and customer service ( finished goods and spare parts ) What are Purposes of Inventory ? Anticipation inventory for future demand ; Fluctuation inventory commonly called safety stock ; Lot-size inventory lot-size purchasing or manufacturing ; Transportation inventory goods on-board shipping ; Hedge inventory to protect against price fluctuations . Design Purchase Manufacture Assemble Ship Inventory Manufacture Assemble Ship Manufacture Inventory Assemble Ship Manufacture Assemble Inventory Ship Delivery lead time Delivery lead time Delivery lead time Delivery lead time Engineer-to-Order Make - to-Order Assemble-to-Order Make-to-Stock Manufacturing Strategies Demand Management [ Demand ] - - A need for a particular product or component. Sources of Demand : Customers Spare parts Promotions Intracompany Characteristics of Demand : Trend Seasonality Random variation Cyclical variation | Year 1 | Year 2 | Year 3 | Forecasting and forecasting techniques (1) Principles of Forecasting forecasts are almost always wrong . Should include an estimate of error. forecast are more accurate for groups of products . forecasts are more accurate for nearer period of time. Forecasting techniques : Qualitative( 定性) techniques -- are based on intuition(直觉) and informed opinion; they therefore tend to be subjective(主观的).they are used for business planning and forecasting for new products , and are used for medium- to long-range planning. Quantitative( 定量) techniques -- based on historical data and assume future will repeat past. They are often in production planning , and the data are usually readily available from company records. | Inventory and Invento
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