C hapter 12 - PowerPoint PPT Presentation

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C hapter 12

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  1. Chapter 12 Inventoryplanning and control Source: Corbis

  2. Rate of supply from input process Rate of demand from output process Inventory Inventory is created to compensate for the differences in timing between supply and demand Source: Alamy/Van Hilversum

  3. Raw Materials • Work in Progress (WIP) • Finished Goods Types of Inventory • Equipment and Buildings • Spares

  4. Benefits of Inventory • Raw Materials • Work in Progress (WIP) • Finished Goods

  5. Expense of Inventory


  6. A paper merchant must get its inventory planning and control right

  7. Class A items Class B items Class C items Source: Howard Smith Paper Group Pareto curve for stocked items 100 90 80 70 60 Percentage of value of items 50 40 30 20 10 90 80 100 70 30 10 40 50 60 20 Percentage of types of items

  8. Class B items – the next 30% or so of medium-value items which account for around 10% of the total stock value Class A items – the 20% or so of high-value items which account for around 80% of the total stock value Class C items – the remaining 50% or so of low-value items which account for around the last 10% of the total stock value Inventory classifications and measures