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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 l.jpg

Chapter Six: Inventory

Part One

“The Importance of Inventory.”




Inventory definitions l.jpg
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 l.jpg
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 l.jpg
Reasons for Holding Inventory

Economies of scale

Transportation

carriers usually

give discounts

for bigger loads.

.

Supplier


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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

.


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Reasons for Holding Inventory

Economies of scale

Warehouse

$

$

$

$

$

$

$

$

$

$

$

Assembly line


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Reasons for Holding Inventory

Economies of scale

Warehouse

Assembly line


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Reasons for Holding Inventory

  • Economies of Scale.


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Reasons for Holding Inventory

  • Economies of Scale.

  • Specialization in manufacturing.


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Reasons for Holding Inventory

Balances supply and demand.

Warehouse

Assembly line


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Reasons for Holding Inventory

It provides protection from uncertainties in

the demand and order cycle.

Warehouse

Assembly line


Reasons to hold inventory l.jpg
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.

.