ENTREPRENEURIAL OPERATIONS
INVENTORY MANAGEMENT
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Order point level
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Material requirements planning
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Time phased order point
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Firms resource planning
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Detailed explanation-1: -Answer: Economic order quantity (EOQ) model. An inventory-control technique that minimizes the total of ordering and holding costs. Demand for an item is known, reasonably constant, and independent of decisions for other items.
Detailed explanation-2: -There are four main types of inventory: raw materials/components, WIP, finished goods and MRO. However, some people recognize only three types of inventory, leaving out MRO. Understanding the different types of inventory is essential for making sound financial and production planning choices.
Detailed explanation-3: -An inventory of an item is said to be falling into the category of independent demand when the demand for such an item is not dependant upon the demand for another item. Finished goods Items, which are ordered by External Customers or manufactured for stock and sale, are called independent demand items.