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MGT613 - Production / Operations Management - Lecture Handout 31

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Related Content: MGT613 - VU Lectures, Handouts, PPT Slides, Assignments, Quizzes, Papers & Books of Production & Operations Management

INVENTORY MANAGEMENT

Learning Objectives

Our discussion on Inventory Management would be complete only when we are able to learn and understand the types of Inventories and objectives of Inventory Control. This would ensure that we are able to understand the major reasons for holding inventories. We would be able to differentiate between independent and dependent demand. We will also learn the requirements of an effective inventory management system. We will review both periodic as well as perpetual Inventory systems. We will discuss in detail the ABC approach with a suitable example. Since our discussion would extend over three lectures we will also discuss the objectives of inventory management, describe the basic EOQ model, Economic Run Size, Quantity Discount Model with solved examples.

Types of Inventories

The five common types of inventories are:

  1. Raw materials & purchased parts.
  2. Partially completed goods called work in progress.
  3. Finished-goods inventories:
    • (manufacturing firms) or
    • merchandise, (retail stores)
  4. Goods-in-transit to warehouses or customers.
  5. Replacement parts, tools, & supplies.

Objective of Inventory Control

To achieve satisfactory levels of customer service while keeping inventory costs within reasonable bounds. Operations Managers are well aware of the fact that customer services with respect to Inventory takes into account both the internal customers as well as external customers.

Read more: MGT613 - Production / Operations Management - Lecture Handout 31

CS605 - Software Engineering II - Lecture Handout 37

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Measuring Change Activity

Measurement of change activity is a way to assess the stability of the requirements and to identify opportunities for process improvement. In this regards, the following could be measured

    • The number of change requests received, open, and closed
    • The cumulative number of changes made including added, deleted, and modified requirements
    • The number of change requests that originated from each source
    • The number of changes proposed and made in each requirement since it was base-lined
    • The total effort devoted to handling changes

    • Read more: CS605 - Software Engineering II - Lecture Handout 37

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