TABLE OF CONTENTS The amount of inventory to have on hand at any given point in time is a very important logistics concern. Just the right amount of inventory is needed to allow continuous operations while preventing stock-outs and storage costs. The cost of inventory can vary with the type of product being stored and the amount that is required. Large costs can be accrued in the types of storage and retrieval systems. The following lists many of the items to be considered when figuring inventory levels:
Daily Demands: The number of inventory items issued per day.
Dead Stock: Items than cannot or will not be sold.
Economic Order Quantity: The most cost-effective amount of resupplied items.
In-Transit: Amount of stock being transported between storage facilities.
Inventory Cycle: The events necessary to maintain an adequate inventory supply.
On-Hand: Amount of stock at each storage location.
Operating Level: Desired quantity needed to support manufacturing.
Order Point: The point in time that orders are initiated.
Order Ship Time: Elapsed time from ordering until that order is received.
Pipeline: The distance between supplier and consumer measured in days.
Procurement Lead Time: Span from order to receiving the shipment.
Reorder Cycle: The time between orders.
Safety Stock: Additional stock required for unexpected demand or delay.
Shelf Life: The amount of time an item may be kept before deterioration.
Speculative Stock: Additional stock kept on the assumption that it will be...
