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Chapter Six: Inventory. Part One “The Importance of Inventory.”. Retail Inventory. Manufacturing Inventory. Supplier. Inventory Definitions. Performance Cycle. The time it takes for a buyer to get a purchase order out to a seller up until when the buyer receives the order. P.O. Supplier.

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chapter six inventory

Chapter Six: Inventory

Part One

“The Importance of Inventory.”

inventory definitions
Inventory Definitions

Performance Cycle

The time it takes for a buyer to get a purchase order out to a seller up until when the buyer receives the order.

P.O

Supplier

inventory definitionss
Inventory Definitionss

Case Fill Rate

The percent of cases or units shipped as ordered

5 cases or 71% of order

The case fill rate is 71%.

7 cases

Supplier

reasons for holding inventory
Reasons for Holding Inventory

Economies of scale

Transportation

carriers usually

give discounts

for bigger loads.

.

Supplier

reasons for holding inventory7
Reasons for Holding Inventory

Economies of scale

Economies of scale

mean that if I can set

up my machine tools

and make the same

product over and over

it cuts costs. This is

called specialization

in manufacturing.

.

$

$

$

$

Assembly line

.

reasons for holding inventory8
Reasons for Holding Inventory

Economies of scale

Warehouse

$

$

$

$

$

$

$

$

$

$

$

Assembly line

reasons for holding inventory9
Reasons for Holding Inventory

Economies of scale

Warehouse

Assembly line

reasons for holding inventory11
Reasons for Holding Inventory
  • Economies of Scale.
  • Specialization in manufacturing.
reasons for holding inventory12
Reasons for Holding Inventory

Balances supply and demand.

Warehouse

Assembly line

reasons for holding inventory13
Reasons for Holding Inventory

It provides protection from uncertainties in

the demand and order cycle.

Warehouse

Assembly line

reasons to hold inventory
Reasons to Hold Inventory
  • It enables achievement of economies of scale.
  • It balances supply and demand.
  • It enables specialization in manufacturing.
  • It provides protection from uncertainties in the demand and order cycle.

.

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