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on planningWhat is account? Integrated Production System I stuff and Inventory Management Chapter 12 ? Ø Inventory each idle goods or materials that atomic number 18 held for future use. ØStock of materials ØStored cleverness Ø Examples ? Types of Inventory ØRaw material ØComponents ØWork-in- influence Ø destroyed goods ØMaintenance/ refurbish/operating supply Why an organization carries inventories: Ø It is rarely doable to forecast sales levels and mathematical product time accurately. gum olibanum fluctuation inventories, most often called safety stock, are well-kept in dictate to minimize the effect of such(prenominal) variation. Ø galore(postnominal) items have high seasonal pauperization; it might be impossible to produce enough quantity during a offensive selling season because of limit production capacity Ø To allow advantage of economies of scales in production and purchasing such as quantity discounts, truck load discount s. Ø to maintain constant gesture of manufacturing phase raw material and parts are required. Ø calibrate up running of cable cars spare parts for ? machines are needed. ? Inventory Costs Disadvantages of Inventory high be period cost (if purchased) enjoin (or setup) cost Costs of forms, clerks wages etcetera ØOrdering costs - associated with costs of placing order and receiving goods e.g. Supplies; Forms; support; etcetera

Order bear on; Clerical ØSetup costs - cost to prepare a machine or process for manufacturing an order e.g. Clean-up costs; Re-tooling costs; registration costs; e tc. Holding (or carrying) cost Capital! , Building lease, insurance, taxes etc. Difficult to avow Hides production problems ? ØHolding costs - associated with holding or carrying size up over time e.g. Obsolescence; Insurance; Extra-staffing; Interest; Pilferage; Damage; storehouse; Etc. ØItem cost ØShortage costs ? ? Classifying of Inventory Problems The Material Flow Cycle Characteristics matter of items Nature of demand Attributes One or...If you want to get a expert essay, order it on our website: OrderCustomPaper.com

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