Inventory Management.pptx

Effective inventory management requires a comprehensive approach that integrates IMSs, ICSs, and Monte Carlo simulation techniques.

1. Inventory Management By Louie John Devera

2. Road Map Inventory Management The Elements of Inventory Management Inventory Control System Monte Carlo Simulation

3. Inventory management - is the overseeing of raw materials, components, work-in-progress, and finished products from manufacturer or supplier to warehouse and then to the point of sale or customer (Investopedia, 2023) - is the process of overseeing the flow of goods from procurement to sale (Heizer & Render, 2011)

4. Efficient inventory management is essential for businesses to maintain customer satisfaction, reduce costs, and boost profitability (NetSuite, 2022).

5. Elements of Inventory Management Inventory is a stock of items kept by an organization to meet internal or external customer demand, Russell, R. S., & Taylor, B. W. (2011).  Examples of Inventories In a manufacturing firm, inventory can take on forms besides finished goods, including: Raw materials Purchased parts and supplies. Partially complete work in progress (WIP) Items being transported. (on transit) Tools, and equipment -Realty -Agribusiness -Automobile -Memorial lots

6. Elements of Inventory Management Demand or Customer Demand - refers to the amount of goods or services that consumers are willing and able to purchase at a given price and time (Kotler & Keller, 2016) (Slack, Chambers, & Johnston, 2020). Types of Customer Internal Customer External Customer Types of Demand Dependent Demand 2. Independent Demand

7. Inventory Cost Inventory cost refers to the total cost of carrying and managing inventory, including the cost of purchasing, storing, and insuring goods, Heizer, J., & Render, B. (201 5 ) . There are three main types of inventory costs 1. Carrying costs 2. Ordering costs 3. Shortage costs: 

8. Inventory Control System is a set of processes, tools, and techniques used by businesses to manage and optimize their inventory levels efficiently, Rickerby, M. (2021) . 

9. Inventory Control System 2 Types of inventory system (Continuous)(fixed-order-quantity) a continual record of the inventory level for every item is maintained. (fixed-time-period) the inventory on hand is counted at specific time intervals—for example, every week or at the end of each month.

10. ABC CLASSIFICATION SYSTEM ABC System   a method of classifying inventory items into categories based on their importance and cost, allowing for more focused management of high-value items

11. ABC CLASSIFICATION SYSTEM For Example Russell, R. S., & Taylor, B. W. (2011). Operations Management: creating value along the supply chain (7th ed.). John Wiley & Sons.

12. ABC CLASSIFICATION SYSTEM For Example Russell, R. S., & Taylor, B. W. (2011). Operations Management: creating value along the supply chain (7th ed.). John Wiley & Sons.

13. ABC CLASSIFICATION SYSTEM For Example Russell, R. S., & Taylor, B. W. (2011). Operations Management: creating value along the supply chain (7th ed.). John Wiley & Sons.

14. ABC CLASSIFICATION SYSTEM Based on Analysis Russell, R. S., & Taylor, B. W. (2011). Operations Management: creating value along the supply chain (7th ed.). John Wiley & Sons.

15. ECONOMIC ORDER QUANTITY MODEL The Basic EOQ Model formula Russell, R. S., & Taylor, B. W. (2011). Operations Management: creating value along the supply chain (7th ed.). John Wiley & Sons. The Basic EOQ Model is a formula for determining the optimal order size that minimizes the of carrying costs and ordering costs Inventory Order Cycle

16. Monte Carlo Simulation Monte Carlo simulation (MCS) is a technique that uses random sampling to model real-world systems. It is a powerful tool for inventory management because it can be used to simulate uncertain variables such as demand, lead times, and shipping costs. Here are some specific purposes of Monte Carlo simulation in inventory management 1 . Optimizing Order Quantity and Reorder Point 2. Assessing Stockout Risk 3. Evaluating Inventory Policies 4. Analyzing Lead Time Uncertainty 5. Optimizing Inventory Costs 6. Forecasting Demand Uncertainty 7. Evaluating Safety Stock Strategies 8. Assessing Supplier Performance 9. Simulating New Product Introductions 10. Analyzing Inventory Trade-Offs

17. Conclusions

18. References: Heizer, J., & Render, B. (2015). Principles of Operations Management. 12th ed. Pearson. Heizer, J., & Render, B. (2011). Principles of operations management. Pearson Investopedia. (2023). Inventory Management. Retrieved from https://www.investopedia.com/terms/i/inventory-management.asp Kotler, P., & Keller, K. L. (2016). Marketing management (15th ed.). Pearson . NetSuite. (2022). Inventory Management: A Guide to Success + Techniques. Retrieved from https://www.netsuite.com/portal/products/erp/warehouse-fulfillment/inventory-management.shtml Rickerby, M. (2021, February). Understanding Inventory Control Systems: Which One is Right for You? Https://Www.extensiv.com/. https://www.extensiv.com/blog/inventory-control-system Russell, R. S., & Taylor, B. W. (2011). Operations Management: creating value along the supply chain (7th ed.). John Wiley & Sons. Slack, N., Chambers, S., & Johnston, R. (2020). Operations and supply chain management (9 th ed.). Pearson