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23 Cards in this Set
- Front
- Back
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ABC Approach
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Classifying inventory according to some use of importance, and allocating control efforts accordingly.
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Cycle Counting
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A physical count of items in inventory.
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Economic Order Quantity (EOQ)
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The order size that minimizes total annual costs.
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Excess Cost
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Difference between purchase price and salvage value of items left over at the end of a period.
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Fill Rate
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The percentage of demand filled by the stock on hand.
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Fixed Order Interval (FOI) Model
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Orders are placed at fixed time intervals.
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Holding (carrying) cost
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Cost to carry an item in inventory for a length of time, usually a year.
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Inventory
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A stock or store of goods.
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Inventory Turnover
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Ratio of average cost of goods sold to average inventory.
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Lead Time
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Time interval between ordering and receiving the order.
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Little`s Law
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The average amount of inventory in a system is equal to the product of the average demand rate and the average time a unit is in the system.
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Ordering Costs
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Costs of ordering and receiving inventory.
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Periodic System
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Physical count of items in inventory made at periodic intervals (weekly, monthly).
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Perpetual Inventory System
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System that keeps track of removals from inventory continuously, thus monitoring current levels of each item.
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Point-of-Sale System
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Record items at time of sale.
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Quantity Discounts
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price reductions for large orders.
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Reorder Point
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When the quantity on hand of an item drops to this amount, the item is reordered.
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Safety stock
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Stock that is held in excess of expected demand due to variable demand and/ or lead time.
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Service Level
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Probability that demand will not exceed supply during lead-time.
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Shortage Costs
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Costs resulting when demand exceeds the supply of inventory; often unrealized profit per unit.
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Single-Period Model
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Model for ordering of perishables and other items with limited useful lives.
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Two-Bin System
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Two containers of inventory; reorder when the first is empty.
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Universal Product code (UPC)
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Bar code printed on a label that has information about the item to which it is attached.
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