Categories: Supply Chain

Components of Inventory Decisions

&NewLine;<&excl;-- WP QUADS Content Ad Plugin v&period; 2&period;0&period;95 -->&NewLine;<div class&equals;"quads-location quads-ad1" id&equals;"quads-ad1" style&equals;"float&colon;left&semi;margin&colon;0px 0px 0px 0&semi;">&NewLine;&NewLine;<&sol;div>&NewLine;<p align&equals;"justify">Inventory held when demand go beyond expectation is known as safety inventory&period; Organization held safety inventory to fulfill the demand in uncertain situations&period; In uncertain demand when inventory could exceed expectation&comma; firms usually seize safety inventory to encounter the unpredictably greater demand&period; In the safety inventory&comma; supply chain manager faces a challenge of how much inventory to hold as safety&period;&&num;160&semi;&&num;160&semi;&&num;160&semi; <&sol;p>&NewLine;<&sol;p>&NewLine;<h3>Seasonal Inventory <&sol;h3>&NewLine;<p align&equals;"justify">&&num;160&semi;<&sol;p>&NewLine;<p align&equals;"justify">To fulfill the expected variability in the demand&comma; seasonal inventory is carried&period; Seasonal inventory should be carried for the time of greater demand and is build up in the time of low demand when firms could not produce all that is demanded&period; Supply chain managers face challenges in determining whether to store up seasonal inventory&comma; if yes then how much to carried&period; If a firm quickly changes the rate of its production method at lower cost&comma; then the company may build seasonal inventory&comma; because its production method can easily manage to the time of greater demand without incurring huge costs&period; Nevertheless&comma; if altering the rate of manufacturing is costly&comma; then it will be better for a firm to build up a smooth manufacturing rate and also build up inventory during time of low demand&period; The managers face challenges in deciding how much inventory should the firm carries&period; There always remains a challenge of cost of having more elastic manufacturing rate against the cost of carrying the extra seasonal inventory&period;&&num;160&semi;&&num;160&semi;&&num;160&semi;&&num;160&semi; <&sol;p>&NewLine;<&sol;p>&NewLine;<h3>Levels of Product Availability<&sol;h3>&NewLine;<p>&&num;160&semi; <&sol;p>&NewLine;<&excl;-- WP QUADS Content Ad Plugin v&period; 2&period;0&period;95 -->&NewLine;<div class&equals;"quads-location quads-ad2" id&equals;"quads-ad2" style&equals;"float&colon;none&semi;margin&colon;0px 0 0px 0&semi;text-align&colon;center&semi;">&NewLine;&NewLine;<&sol;div>&NewLine;&NewLine;<p align&equals;"justify">Levels of goods accessibility is the part of demand that is fulfilled in the time product remains in the inventory&period; A greater level of goods availability gives a greater level of responsiveness but it results in extra cost&comma; because higher inventory is stocked but is used infrequently&period; On the other side&comma;&&num;160&semi;&&num;160&semi; lower product availability decreases inventory holding cost however it increases the number of consumers who are not responded on time&period; The basic challenge faced in this type of inventory decision is the loss from not responding consumers on time and cost of inventory to product availability&period;&&num;160&semi;&&num;160&semi;&&num;160&semi;&&num;160&semi;&&num;160&semi; &NewLine;<&excl;-- WP QUADS Content Ad Plugin v&period; 2&period;0&period;95 -->&NewLine;<div class&equals;"quads-location quads-ad3" id&equals;"quads-ad3" style&equals;"float&colon;none&semi;margin&colon;0px&semi;">&NewLine;&NewLine;<&sol;div>&NewLine;&NewLine;

Page: 1 2

mbalectures

Recent Posts

Walmat and JCPenney E-Commerce Sales Strategy

Walmart Inc. is the world’s largest retailer, and it is one of the most admired…

3 years ago

Google – CSR and Sustainable Management

This article will analyze in detail the role of managers in the adaptation of corporate…

3 years ago

Strategic Analysis of British Airways

British Airways is a renowned airline company, which has gained success as well as faced…

3 years ago

Knowledge Management System for MJR Advertising

The article is related to the development of a Knowledge Management System (KMS) for MJR…

3 years ago

IKEA – Sales and Strategic Marketing

The report focused on analysis of IKEA, a prominent retail organization, with global operations. The…

3 years ago

Analysis of HRM Strategies at PlusNet and Virgin Media

The report offers an analysis of the human resource management strategies implemented at PlusNet and…

3 years ago