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INTRODUCTION
Raw materials
Purchased parts
Components
Subassemblies
Work-in-process
Finished goods
Reasons for keeping Inventories
To stabilise production
To take advantage of price discounts
To meet the demand during the
replenishment period
To prevent loss of orders(sales)
To keep pace with changing market
conditions
Objectives and Benefits
Decisions:
How much to order?
When to order?
ECONOMIC ORDER QUANTITY
Minimum
Total Annual
Stocking Costs
Total Annual
Stocking Costs
Annual
Carrying Costs
Lower
Annual
Ordering Costs
Order Quantity
Smaller EOQ Larger
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TYPES OF INVENTORY MODELS
ABC analysis
VED Analysis
Material requirements planning (MRP)
CONCLUSIONS