HTM 2030 Lecture Notes - Lecture 7: Perpetual Inventory
Document Summary
For non-perishable goods, there are two basic methods to other foods: periodic order method, order triggers by time, orders based on regular, recurring dates with a consistent time interval in between, important information: Question 4 : using the periodic order method, determine order amount. Question 5: using the periodic order method, determine order amount order frequency = 1 month normal usage = 12 cans per week. Expected to be a busy month, 50% increase in demand. 48 - 6 + 18 = 60 cans. 60 + (50% increase in normal usage) = 60 + (48 * 0. 5) = 60+24 =84 cans. Desired ending inventory: amount needed on hand to last until the next delivery arrives, must take into account: Changes (increase) in business levels and product demand: The number of items an inventory can reach before an order is triggered: important information, normal usage, time for the delivery to arrive, safety factor.