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To download
a free copy of RealPlayer 8 Basic, click here. |
| As discussed in Chapter 10, the high cost of inventory, and the potential
for there to be excess inventory makes it a high priority item for
manufacturers. The difficulty lies with creating a balance between
minimizing inventory holding costs and meeting demand. |
VIDEOmi1 |
| Different types of inventory have different uses
in manufacturing and services. |
VIDEOmi2 |
| Managing inventory results in reduction of
inventory related costs, including holding and ordering costs. |
VIDEOmi3 |
| For a manufacturer like Navistar, manufacturing
components make up a huge inventory, in order to meet production
schedules. This is the classic dependent demand inventory scenario.
Coordinating parts availability with production schedules is a challenge,
particularly as inventory levels are reduced, but the demand can be
calculated using MRP logic. |
VIDEOmi4 |
| For a non-manufacturer, such as a service parts
supplier, independent demand inventory must be managed. The demand for
this inventory must be forecast. In a service part environment, all parts
are not carried at all distribution centers (DCs). Tight
communication between DCs enables them together to meet virtually
all demand. |
VIDEOmi5 |
| Variability of demand makes the service parts
provider more dependent on forecasts more dependent on systems that
include levels of safety stock to deal with the demand uncertainty. |
VIDEOmi6 |
