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19 Cards in this Set
- Front
- Back
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Inventory Holding Cost |
the sum of the cost of capital and the variable costs of keeping items on hand, such as storage and handling, taxes, insurance, and shrinkage |
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Raw Materials |
the inventories needed for the production of services or goods |
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Work-In-Process |
items, such as components or assemblies, needed to produce a final product in manufacturing or service operations |
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Finished Goods |
the items in manufacturing plants, warehouses, and retail outlets that are sold to the firm's customers |
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Cycle Inventory |
the portion of total inventory that varies directly with lot size |
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Lot Sizing |
the determination of how frequently and in what quantity to order inventory |
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Safety Stock Inventory |
surplus inventory that a company holds to protect against uncertainties in demand, lead time, and supply changes |
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Anticipation Inventory |
inventory used to absorb uneven rates of demand or supply |
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Pipeline Inventory |
inventory that is created when an order for an item is issued but not yete received |
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ABC Analysis |
the process of dividing SKUs into three classes, according to their dollar usage, so that managers can focus on items that have the highest dollar value |
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Economic Order Quantity |
the lot size that minimizes total annual inventory and ordering costs |
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Continuous Review System |
a system designed to track the remaining inventory of a SKU each time a withdrawal is made to determine whether it is time to reorder |
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Reorder Point |
the predetermined minimum level that an inventory position must reach before a fixed quantity of the SKU is ordered |
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Inventory Position |
the measurement of a SKU's ability to satisfy future demand |
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Scheduled Receipts |
orders that have been placed but have not yet been received |
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Backorder |
a customer order that cannot be filled when promised or demanded but is filled later |
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Cycle-Service Level |
the desired probability of not running out of stock in any one ordering cycle, which begins at the time an order is placed and ends when it arrives in stock |
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Protection Interval |
the period over which safety stock must protect the user from running out of stock |
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Periodic Review System |
a system in which an item's inventory position is reviewed periodically rather than continuously |
