01:198:170 Lecture Notes - Lecture 4: Finished Good

• School: Rutgers University
• Department: Computer Science
• Course: 01:198:170
• Professor: F Geraci

Document Summary

Inventory- quantities of goods/materials that are in stock. Usually one of the largest assets a company has. Want enough to meet demand and enough materials to make more product. Too much inventory need to store them costs space, money, etc. Too little shortage, nothing to sell miss out on money, might expire (liability) Four types of inventory: raw materials- purchased materials that are used as parts/products, work-in-process (wip)- goods in stages of completion, finished goods- completed goods that are available for sale. Make to order: do not make goods until an order is received. Make to stock: make goods before an order is received: maintenance, repair, and operating (mro)- materials used in process but not part of the. Spare parts, consumables (oil, gas), etc. final product. Service inventory- activities carried out in advance of customer"s arrival. Ex: restaurants can set up tables, prep meals, but can"t do actual service. Being prepared for surplus/shortage demand (safety stock)