1、CHAPTER 6Inventory ManagementPurposes of Inventory6-2Enables the firm to achieve economics ofscaleBalances supply and demandEnables specialization in manufacturingProvides protection from uncertainties in demand and order cycleActs as a buffer between critical interfaces within the supply chainMcGra

2、w-Hill/IrwinCopyright 2001 by The McGraw-Hill Companies, Inc. All rights reserved.6-3 aThe Effect of Reorder Quantity on 6-3 a Average Inventory Investment with Constant Demand and Lead TimeA. Orderquantity of 400 unitsOrderInventoryOrder400ery2000102030405060DaysMcGraw-Hill/IrwinCopyright 2001 by T

3、he McGraw-Hill Companies, Inc.All rights reserved.OrderplacedarrivalOrderplacedarrivalAverag cycle invento6-4 bThe Effect of Reorder Quantity on Average Inventory Investment with Constant Demand and Lead Time 6-3 b B. Order quantity of 200 unitsInve ntoryAveragery2001000102030405060DaysMcGraw-Hill/I

4、rwinCopyright 2001 by The McGraw-Hill Companies, Inc. All rights reserved.OrderplacedOrde rarrivalcycleinvento6-5cThe Effect of Reorder Quantity on Average Inventory Investment with Constant Demand and Lead Time 6-3 c C. Order quantity of 600 unitsInventory6003000102030405060All rights reserved.Days

5、McGraw-Hill/IrwinCopyright 2001 by The McGraw-Hill Companies, Inc.Order placedOrder arrivalAverage cycle inventory6-6 aAverage Inventory Investment Under Conditions of Uncertainty 6-4 a A. With variable demandInve ntory200ey100Ave ra geinve ntory40Safety(150 )stock(50)McGraw-Hill/IrwinCopyright 2001

6、 by The McGraw-Hill Companies, Inc. All rights reserved.Averag cycle inventor102030Days86-7 bAverage Inventory Investment UnderConditionsofUncertainty 6-4 b B. With variable lead timeInve ntory200ey100Ave ra geinve ntory40Safety(140 )stock(40)McGraw-Hill/IrwinCopyright 2001 by The McGraw-Hill Compan

7、ies, Inc. All rights reserved.Averag cycle inventor122030Days106-8 cAverage Inventory Investment Under Conditions of Uncertainty 6-4 c C. With variable demand and le ad timeInve ntory200ey100Ave ra geinve ntory40(200 )Safetystock(100)McGraw-Hill/IrwinCopyright 2001 by The McGraw-Hill Companies, Inc.

8、 All rights reserved.Averag cycle inventor2030Days128106-9The EOQ Model 6-5 2PD CVEOQ = where:P = The ordering cost (dollars per order)D = Annual demand or usage of the product (number of units)C = Annual inventory carrying cost (as a percentage of product cost or value)V = Average cost or value of

9、one unit of inventoryMcGraw-Hill/IrwinCopyright 2001 by The McGraw-Hill Companies, Inc. All rights reserved.6-10Cost Trade-offs to Determine the Most Economic Order Quantity 6-6 Total costAnnual cost (dollars)Lowest total cost (EOQ)Inventory carrying costOrdering costSize of orderMcGraw-Hill/IrwinCo

10、pyright 2001 by The McGraw-Hill Companies, Inc.All rights reserved.6-11Cost Trade-offs Required to Determinethe Most Economic Order QuantityInventory 6-7Number of Orders (D/Q)Ordering CostPX (D/Q)Carrying Cost1/2 Q X C X VTotal CostOrder Quantity406080100120140160200300400120806048403530241812$ 4,80

11、03,2002,4001,9201,6001,4001,200960720480$ 5007501,0001,2501,5001,7502,0002,5003,7505,000$ 5,3003,9503,4003,1703,1003,1503,2004,4604,4705,480McGraw-Hill/IrwinCopyright 2001 by The McGraw-Hill Companies, Inc. All rights reserved.6-12Symptoms of Poor Inventory 6-8Increasing numbers of back ordersIncreasing dollar investment in inventory with back orders remaining constant.High customer turnover rate.Increasing number of orders being canceled. Periodic lack of sufficient storage