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14 Cards in this Set
- Front
- Back
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ABC inventory classification
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Divides inventory into dollar volume categories that map into strategies appropriate for the category.
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Cycle counting
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A physical inventory-taking technique in which inventory is counted on a frequent basis rather than once or twice a year.
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Dependent demand
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The need for any one item is a direct result of the need for some other item, usually an item of which it is a part.
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Fixed–order quantity model (Q-model)
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An inventory control model where the amount requisitioned is fixed and the actual ordering is triggered by inventory dropping to a specified level of inventory.
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Fixed–time period model (P-model)
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An inventory control model that specifies inventory is ordered at the end of a predetermined time period. The interval of time between orders is fixed and the order quantity varies.
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Independent demand
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The demands for various items are unrelated to each other.
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Inventory
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The stock of any item or resource used in an organization.
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Inventory position
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The amount on hand plus on-order minus backordered quantities. In the case where inventory has been allocated for special purposes, the inventory position is reduced by these allocated amounts.
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Inventory turn
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A measure of the expected number of times inventory is replaced over a year.
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Optimal order quantity Qopt
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This order size minimizes total annual cost.
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Price-break model
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This model is useful for finding the order quantity of an item when the price of the item varies with the order size.
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Reorder point (R)
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An order is placed when inventory drops to this level.
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Safety stock
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The amount of inventory carried in addition to the expected demand.
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Single-period problem
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Answers the question of how much to order when an item is purchased only one time and it is expected that it will be used and then not reordered.
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