From the course: Production Management Foundations
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Inventory management in production systems
From the course: Production Management Foundations
Inventory management in production systems
- Customer demand is highly variable, uncertain, and almost impossible to forecast accurately. And this makes it very difficult to manage inventory at the right level, or should I say inventories? Because a factory manager is concerned with inventory before, during, and after production. Raw materials, parts, sub assemblies, and supplies must all be ordered and managed before production can begin. Work in process inventory must be managed throughout the production process to achieve throughput goals, and finished goods inventory must be stored and moved properly to meet customer demand. One additional difficulty in managing inventory is that different departments within the company have different goals. The factory manager certainly doesn't want to run out of materials, and salespeople need to have products available to meet customer orders, so both these departments want to have enough inventory on hand to run an efficient factory and to provide excellent customer service. On the…
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