Inventory Management Principles

Inventory management is important for businesses of any size as it impacts profitability, customer satisfaction, and operational efficiency.

Small businesses often track stock manually and determine reorder points using spreadsheet formulas.

Larger businesses use enterprise resource planning (ERP) software.

<p>Supply chain integration helps ensure a seamless flow of goods and minimizes disruptions.</p> Signup and view all the answers

<p>The objectives include balancing costs, tracking stock levels, and integrating the supply chain.</p> Signup and view all the answers

<p>Inventory management directly impacts profitability by controlling costs and ensuring customer demands are met.</p> Signup and view all the answers

<p>To optimize inventory levels by striking a balance between overstock and understock situations.</p> Signup and view all the answers

<p>It ties up capital and leads to increased holding costs.</p> Signup and view all the answers

<p>Understocking can result in missed sales opportunities and dissatisfied customers.</p> Signup and view all the answers

<p>Minimizing holding costs associated with storing excess inventory.</p> Signup and view all the answers

<p>It ensures that products are consistently available when needed, preventing stockouts and backorders.</p> Signup and view all the answers

<p>Inventory ties up a significant portion of a company's capital, effective management ensures capital is not unnecessarily tied up in excess inventory.</p> Signup and view all the answers

<p>Sealed bag</p> Signup and view all the answers

<p>Refill order arriving as the last 500 paper napkins are used at a restaurant.</p> Signup and view all the answers

<p>Stocking up on disinfectant and treats in case of delivery delays due to flooding in an isolated community by a veterinarian.</p> Signup and view all the answers

<p>Shrink wrap</p> Signup and view all the answers

<p>120 meals</p> Signup and view all the answers

<p>4%</p> Signup and view all the answers

<p>Raw materials, work in process, finished goods</p> Signup and view all the answers

<p>By minimizing costs, satisfying customer demand, and managing cash flow effectively.</p> Signup and view all the answers

<p>Raw materials, work-in-progress, merchandise and supplies, finished goods</p> Signup and view all the answers

<p>Various materials purchased for the production process.</p> Signup and view all the answers

<p>Raw materials in the process of being transformed into a finished product.</p> Signup and view all the answers

<p>By ensuring long-term sustainability and achieving a competitive advantage.</p> Signup and view all the answers

<p>To account for rising raw material prices or approaching peak sales time.</p> Signup and view all the answers

<p>Decoupling inventory is kept at different production line stations to prevent work stoppages due to varying speeds of production lines, while safety stock is a buffer against demand or supply fluctuations.</p> Signup and view all the answers

<p>Decorators keeping a store of sugar roses to adorn wedding cakes, independent of the supply of frosting mix.</p> Signup and view all the answers

<p>By ordering in lots to match the required stock level with the lowest storage cost.</p> Signup and view all the answers

<p>Service inventory refers to the capacity of a business to provide services within a specific period.</p> Signup and view all the answers

<p>Transit inventory, also known as pipeline inventory, is stock in motion between different points in the supply chain.</p> Signup and view all the answers