Managing Inventory and Monitoring Supplier Ordering and Lead Times
3-5 Pages not including Title or Reference Pages. APA Format. At least 3 References with in-text citations.
- Week 4: Managing Inventory
- Describe how a firm would establish reordering levels.
- Include consumption-based ordering.
- Include how firms use inventory turns.
- How would the firm establish safety, buffer, and seasonal stock standards?
- How do obsolescence and disposition of excess affect the firm’s profitability?
- Describe how a firm would establish reordering levels.
- Week 4: Monitoring Supplier Ordering and Lead Times
- What approaches are best for collaborating with suppliers concerning their ordering and process lead times?
- How would you advise managing supplier performance?
- What metrics could a supplier provide to show performance?
Attaching weeks 1-3 as a reference for this assignment.
- managing Inventory
Establishing re-order levels
Re-order level is a set threshold of inventory quantity upon which a company orders new inventory. This level is calculated by multiplying the lead time and the average daily usage of inventory. At this point, the company places a new order or manufacture. Lead time, in this case, is the number of days it takes to get the goods supplied. This level varies from one company to another but the dominant aspect is that any inventory management system has an established re-order level. Establishing re-order levels requires a careful monitoring of the movement of stock, inventory turnovers and different seasons in which demand increases or decreases drastically, for instance, holidays, black Fridays, etc.
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