Term
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Definition
| any idle resource held for future use. Those stocks or items used o support production (raw material), supporting activities (drill bits) and customer service (finished goods, spare parts) |
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Term
| how much of inventory is current assets in a typical firm |
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Definition
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Term
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Definition
| cycle stock, safety stock, anticipation inventory (held in anticipation of customer demand), hedge inventory (buffer against a potential event-stike), transportation inventory, smoothing inventories |
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Term
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Definition
| demand from outside the organization; unpredictable, usually forecasted |
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Term
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Definition
| tied to the production of another item, relevant mostly to manufacturers |
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Term
| independent demand systems |
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Definition
| periodic review (restocking levels), continuous review (EOQ, reorder point and safety stock, quantity discounts), single period (target service level, target stocking point) |
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Term
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Definition
| additional inventory beyond amount needed to meet average demand during lead time, protect against uncertainties in demand or lead time, balance the costs of stocking out against the cost of holding extra inventory |
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Term
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Definition
| number of standard deviations above average demand during lead time |
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Term
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Definition
| the lower the risk of stocking out, the higher the average inventory level |
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Term
| single period inventory systems |
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Definition
| a system used when demand occurs in only a single point in time; must weigh the cost of being short against the cost of having excess |
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Term
| developing a single period inventory system |
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Definition
1.determine a target service level that strikes the best balance between shortage costs and excess cost
2. use the target service level to determine the target stocking point for the item |
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