SCM 470 Quiz 2 Graded A+
Safety Stock ️protects from uncertainty
Decoupling Inventory ️different processing rates
Anticipatory Inventory ️prebuild inventory for the future
Cycle Stock ️average lot or badge size
Pipeline Inventory ️moving from point A to point B
Reasons to HOLD...
Anticipatory Inventory ✔️prebuild inventory for the future
Cycle Stock ✔️average lot or badge size
Pipeline Inventory ✔️moving from point A to point B
Reasons to HOLD inventory ✔️- Meet customer demand
- Temper uncertainty
- Economies of scale
- Profit during inflation
- Manage lead times
Reasons to MINIMIZE inventory ✔️- Obsolescence, breakage, theft
- Storage and handling costs
- Taxes and insurance
- Opportunity costs of money
- Hidden costs of quality
Work in Process (WIP) ✔️throughput time * processing rate (demand)
All 7 types of muda ✔️1) Waiting time, 2) transport, 3) overprocessing, 4) overproduction, 5) inventory,
6) motion, 7) defect
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