C hapter 12
description
Transcript of C hapter 12
Slack, Chambers and Johnston, Operations Management 5th Edition © Nigel Slack, Stuart Chambers, and Robert Johnston 2007
Chapter 12
Inventory planning and control
Source: Corbis
Slack, Chambers and Johnston, Operations Management 5th Edition © Nigel Slack, Stuart Chambers, and Robert Johnston 2007
Inventory is created to compensate for the differences in timing between supply and demand
Rate of supply from input process
Rate of demand from output processInventory
Source: Alamy/Van Hilversum
Slack, Chambers and Johnston, Operations Management 5th Edition © Nigel Slack, Stuart Chambers, and Robert Johnston 2007
Types of Inventory Raw Materials
Work in Progress (WIP)
Finished Goods
Equipment and Buildings
Spares
Slack, Chambers and Johnston, Operations Management 5th Edition © Nigel Slack, Stuart Chambers, and Robert Johnston 2007
Benefits of Inventory
Raw Materials
Work in Progress (WIP)
Finished Goods
Slack, Chambers and Johnston, Operations Management 5th Edition © Nigel Slack, Stuart Chambers, and Robert Johnston 2007
Expense of Inventory
Slack, Chambers and Johnston, Operations Management 5th Edition © Nigel Slack, Stuart Chambers, and Robert Johnston 2007
A paper merchant must get its inventory planning and control right
Slack, Chambers and Johnston, Operations Management 5th Edition © Nigel Slack, Stuart Chambers, and Robert Johnston 2007
100
90
80
70
60
50
40
30
20
10
100908070605040302010
Class C items
Class B items
Class A items
Pareto curve for stocked items
Percentage of types of items
Pe
rce
nta
ge
of v
alu
e o
f ite
ms
Source: Howard Smith Paper Group
Slack, Chambers and Johnston, Operations Management 5th Edition © Nigel Slack, Stuart Chambers, and Robert Johnston 2007
Inventory classifications and measures
Class A items – the 20% or so of high-value items which account for around 80% of the total stock value
Class B items – the next 30% or so of medium-value items which account for around 10% of the total stock value
Class C items – the remaining 50% or so of low-value items which account for around the last 10% of the total stock value