33:799:301 Lecture 7: Week 4 - Part 3 - 02_13_2019

• School: Rutgers University
• Department: Supply Chain Management
• Course: 33:799:301
• Professor: A Taitt

Document Summary

Inventory is one of company"s largest assets. Maintaining adequate finished product inventory allows company to fill customer orders immediately. Maintaining adequate materials inventory allows a company to support manufacturing operations and the production plan while avoiding delays. Failing to manage inventory adequately can lead to significant issues and inefficiencies throughout the supply chain, including dissatisfied customers, etc. Quantity of goods and materials that are held in stock. Inventory is an asset and potentially a liability. Holding some inventory may be needed to maintain operations and ensure that products are available. More inventory requires more space and space costs money. Company also has to pay security, insurance, taxes, etc. Every production company stats with some type of raw material. Question of how much of a raw material should be held. Companies might be willing to increase costs by storing extra if they think there will be a shortage. May not have good or timely visibility into this part of inventory.