The danger of stock out in this model occurs only during the lead time, b/w the time an order is placed the time it is received. Also requires more time to maintain b/c every addition or withdrawal is logged. More appropriate for important items such as critical repair parts b/c there is closer monitoring and therefore quicker response to potential stock out. Favors more expensive items b/c average inventory is lower. Financial Reporting, Analysis, Cloud Applications, Cash Flow Forecasting. It is a perpetual system which requires that every time a withdrawal from inventory or an addition to inventory is made, records must be updated to reflect whether the reorder point has been reached. Accounts Payable, Financial Reporting, Bowling, POM-QM for Windows. Initiates an order when the even of reaching a specified reorder level occurs. Aka economic order quantity, EOQ, and Q model. Inventory for the item is monitored until it gets down to a level where the risk of stocking out is great enough that we are compelled to order. Used when we want to maintain an item "in stock" and when we resupply the item, a certain # of units must be ordered each time.
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