,Inventory Functionality,Inventory Cost,Planning Inventory,Chapter 4 Inventory Strategies and Management,Inventory Management Practices,4.1 Inventory Functionality,From an inventory perspective, the ideal situation would be response capability to manufacture products to customer specification. While a zero-inventory manufacturing/ distribution system is typically not attainable, it is important to remember that each dollar invested in inventory is a trade-off with an alternative use of assets that may provide a better return.,Inventory Functionality,While a zero-inventory manufacturing/distribution system is typically not attainable, it is important to remember that each dollar invested in inventory is a trade-off with an alternative use of assets that may provide a better return.,Sentence Explanations,尽管零存货的生产/ 分销体系通常是很不容易生成的，重要的是要记住投资于存货的每一美元都要与获得更多回报的资产使用进行均衡。,2. Given a specific manufacturing/marketing strategy, inventories planned and committed to operations can only be reduced to a level consistent with performing the four inventory functions.,Sentence Explanations,如果有一个明确详细的生产/营销战略的话，存货计划和实施运营只能降低到与执行这四个存货功能一致的水平。,3. With accumulated experience over a number of seasonal periods, the inventory required to achieve marginal sales during periods of high demand can be projected fairly well.,Sentence Explanations,由于不同季节所积累的经验，在需求高峰期所需要达到边际销售量的存货就能够计划得相当完善。,1. What would the ideal situation be from an inventory perspective? 2. Why do many enterprises still carry an average inventory that exceeds their basic requirements? Discuss the reasons through the four prime functions of inventory. 3. What are the four functions of inventory? 4. Discuss how the inventory creates value and reduce total cost.,Questions,4.2 Inventory Cost,Inventory Cost,H=hC,To summarize, the costs that must be considered in any lot sizing decision are as follows: Average price per unit purchased, $C/unit Fixed ordering cost incurred per lot, $S/lot Holding cost incurred per unit per year, $h/unit/year = hC,Before we can suggest actions that a manager can take to reduce cycle inventory, it is important to understand why stages of a supply chain produce or purchase in large lots and how lot size reduction affects supply chain performance.,Sentence Explanations,在我们能够建议一位经理采取降低循环存货的行动之前，理解其在供应链中处于哪一个生产阶段或在大批量采购中处于何种地位，以及怎样减低生产或采购规模能够影响供应链的运作是非常重要的。,2. For example, a fixed administrative cost may be incurred to place an order, a trucking cost may be incurred to transport the order, and a labor cost incurred to receive the order.,Sentence Explanations,例如，因为去某地订货要发生固定的管理费用，为了运输或许会发生货车装运费用，接收订单或许会发生人工费用。,3. The primary role of cycle inventory is to allow different stages in the supply chain to purchase product in lot sizes that minimize the sum of the material, ordering, and holding cost.,Sentence Explanations,循环存货的主要作用是为供应链的不同阶段在采购产品时能够在原材料、订货和存货等的总体成本上达到最小化。,1. What is cycle inventory? 2. What is the fixed ordering cost? 3. Describe the holding cost. 4. Discuss the affects which should be considered in any lot sizing decision.,Questions,4.3 Planning Inventory,Planning Inventory,The appropriate level of safety inventory is determined by the following two factors: 1. The uncertainty of demand or supply 2. The desired level of product availability,Safety inventory is carried because demand forecasts are uncertain and a product shortage may result if actual demand exceeds the forecast demand.,Sentence Explanations,安全存货实施的原因是需求的预具有不确定性，如果实际需求超过预测需求，产品短缺就可能产生。,2. In the absence of demand uncertainty, such a policy ensures that the new lot arrives just as the last purse is being sold at the store.,Sentence Explanations,如果出现需求的变化，安全存货政策能够保证新货到达时，上一批货正好被卖完。,3. Product availability reflects a firms ability to fill a customer order out of available inventory.,Sentence Explanations,产品可用性反映出一个公司超出可用存货之外的满足顾客订单的能力。,4. Assume that B&M provides Palm Pilots to 90 percent of its customer from inventory, with the remaining 10 percent lost to a neighboring competitor because of a lack of available inventory.,Sentence Explanations,以B&M为例，90%的Palm Pilots供应均来自存货，因为缺货，10%的订货被同类竞争者抢走。,5. If the manager at B&M manages inventory such that the store does not run out of inventory in 6 out of 10 replenishment cycles, the store achieves a cycle service level of 60 percent.,Sentence Explanations,B & M管理存货的经理设计一个商店的60%由补充循环完成，那么，该商店的循环服务水平为60%。,6. In the 60 percent of cycles in which B&M does not run out of inventory, all customer demand is satisfied from available inventory.,Sentence Explanations,在60%的循环服务水平下，B & M的没有发生存货的短缺，全部顾客的需求从可得到的存货中得到满足。,7. Tracking order fill rates is important when customers place a high value on the entire order being filled simultaneously.,Sentence Explanations,当顾客的单个订单价值非常高，跟踪所有产品填充率的同步性是非常重要的。,1. What is safety inventory? 2. Describe the factors which determine the appropriate level of safety inventory. 3. Explain the demand uncertainty in your words. 4. How to measure product ava