ACCTG 1 Lecture Notes - Lecture 18: Material Requirements Planning, Complete Control, Bullwhip
Document Summary
Chapter 11 managing inventory throughout the supply chain: the role of inventory. Inventory: those stocks/items used to support production, supporting activities (e. g. repair), and customer service. Independent versus dependent demand inventory independent demand inventory: inventory items whose demand levels are beyond a company"s complete control to company"s planned production of another item, can be predicted with great accuracy. Illustrates both cycle and safety stock (increasing restocking level effectively increases safety stock) best suited safety stock) is not prohibitive not well suited to manage critical and/or expensive. For the variables assume they are constant; Reorder points and safety stock eoq tells managers how much to order but not when . Rop = dl (d and l are rarely fixed) must take into account the variability in demand rate and lead time, rop = dl + ss (ss: safety stock) decision how much safety stock to.
