Matthew W Ford
Week 9 Study Notes (Updated 10/12/2012 02:59 PM)
Is the national inventory-to-sales ratio trending up or down? What does this imply about the typical US company’s ability to manage inventory?
What are some of the advantages of keeping inventory? What are some drawbacks?
Inventory Models When Demand is Certain
Be able to diagram the (Q, r) model and label its key elements. Know the key assumptions incorporated into this model.
Identify and explain the two key cost categories related to inventory.
Be able to calculate the total annual cost of inventory given the TAC formula and some data.
What does Q symbolize?
What does the acronym EOQ stand for? What does it represent? Why should managers view the EOQ method as a compelling approach for determining inventory policy? Be able to calculate EOQ and interpret your results.
Know how to determine the reorder point in the (Q, r) inventory model.
What is safety stock and how does it help managers implement inventory policies?
Explain the difference between review period and reorder point inventory policies. Give an example of each. Under what situations would each of these policies is appropriate?
*You will not be responsible for items in red on the exam.
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