SCM 300 Study Guide - Demand Forecasting, The Home Depot, Walmart
Document Summary
Inventory is an expense, yet it is a required cost of doing business. In order to satisfy customer expectations inventory is a requirement. This module discussed the different types of inventory and the physical and mental processes that need to be considered in developing an inventory policy. In order to develop an appropriate level of inventory supply it is required that you understand demand. Inventory is your insurance against risk at every state supply chain. Stock of any item or resource used in an organization, not just what you sell, but what you need to run business on day-to-day basis. Considerations: storage (space, heat/cool environment, energy requirements, labor, handling, buy/lease, cost), transport (vehicle, cool/heat, fuel, labor, packaging, cost), shrinkage (pilferage, security, lost items, damaged, obsolescence), money (cash, financing terms, taxes, insurance), legal. Common risks - breakdowns, accidents, weather, defects, strikes, illness, forecasting errors, theft. Buy it suppliers have the same risks. Make it labor, machine breakdowns, high demand .
