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Lecture

Inventory Management Models

In course

ME-419: Production management

Production management deals with producing goods sustainably at the right time, quantity, and quality with the minimum cost. This course equips students with practical skills and tools for effectively managing demand, supply, and implementing advanced anal ...

Description

This lecture by the instructor covers various inventory management models, including Economic Order Quantity (EOQ), Economic Production Quantity (EPQ), and the Discount Model. It also discusses Safety Stock, Periodic Review System, and the Single Period Inventory Model, emphasizing the impact of demand and supply uncertainties on inventory decisions.

Instructor

Amin Kaboli

Dr. Amin Kaboli is an external lecturer for at the Mechanical Engineering Section at EPFL and teaches Production Management (ME-419), Continuous Improvement (ME-498) to graduate students and Digital Supply Chain, Innovation and Digitization, and Sustainable Change Leadership to business executives and managers at International Institute for the Management of Logistics and Supply Chain (IML). Amin supports many organizations ranging from Fortune 500 corporations to entrepreneurial firms and industries as diverse as Watch, Consumer Goods, Food and Beverage, MedTech, and Pharma. He obtained his Ph.D. in Manufacturing Systems & Robotics, specialized in Supply Chain Management from EPFL. You can watch his TEDx talk on “Leading Change Consciously” here. TEDx talk here.

Official source

Ontological neighbourhood

Business

Supply chain: Supply chain management

Related concepts (32)

Inventory

Inventory (American English) or stock (British English) refers to the goods and materials that a business holds for the ultimate goal of resale, production or utilisation. Inventory management is a discipline primarily about specifying the shape and placement of stocked goods. It is required at different locations within a facility or within many locations of a supply network to precede the regular and planned course of production and stock of materials.

Inventory control

Inventory control or stock control can be broadly defined as "the activity of checking a shop's stock". It is the process of ensuring that the right amount of supply is available within a business. However, a more focused definition takes into account the more science-based, methodical practice of not only verifying a business's inventory but also maximising the amount of profit from the least amount of inventory investment without affecting customer satisfaction.

Inventory management software

Inventory management software is a software system for tracking inventory levels, orders, sales and deliveries. It can also be used in the manufacturing industry to create a work order, bill of materials and other production-related documents. Companies use inventory management software to avoid product overstock and outages. It is a tool for organizing inventory data that before was generally stored in hard-copy form or in spreadsheets.

Vendor-managed inventory

Vendor-managed inventory (VMI) is an inventory management practice in which a supplier of goods, usually the manufacturer, is responsible for optimizing the inventory held by a distributor. Under VMI, the retailer shares their inventory data with a vendor (sometimes called supplier) such that the vendor is the decision-maker who determines the order size, whereas in traditional inventory management, the retailer (sometimes called distributor or buyer) makes his or her own decisions regarding the order size.

Economic order quantity

Economic Order Quantity (EOQ), also known as Financial Purchase Quantity or Economic Buying Quantity (EPQ), is the order quantity that minimizes the total holding costs and ordering costs in inventory management. It is one of the oldest classical production scheduling models. The model was developed by Ford W. Harris in 1913, but R. H. Wilson, a consultant who applied it extensively, and K. Andler are given credit for their in-depth analysis.

Related lectures (35)

Inventory Management: Principles and Models

Explores inventory management principles, decision variables, costs, and models like EOQ and EPQ, including challenges in implementing optimal order quantities.

Inventory Management: Techniques and Models

Covers economic order quantity, safety stock, demand uncertainties, and inventory management models.

Inventory Management Decisions

Covers inventory management decisions, optimal order quantities, and company order policies.

Production Planning & Capacity Management

Covers production planning, capacity management, demand disruptions, and aggregate planning strategies in the context of global supply chains.

Material Requirement Planning (MRP)