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Related Content: MGT613 - VU Lectures, Handouts, PPT Slides, Assignments, Quizzes, Papers & Books of Production & Operations Management

INVENTORY MANAGEMENT-I

Learning Objectives

Inventory Management is the procurement, use and distribution of Inventory; some text books use the work Inventory control for the same concept. The word control ensures that inputs, the process itself and the outputs are all manageable. This inventory control concept helps us to understand two important concepts of Operations Management i.e. Supply Chain Management and Just In Time Production Systems. In this lecture we will study the ABC classification System, Inventory Ordering and Holding Costs and Economic Order Quantity Model.

Key Inventory Terms

The Key Inventory Terms we should know are Lead time, Holding (carrying) costs, Ordering ( Set up) Costs and Shortage(Stock out) costs

1. Lead time: Time interval between ordering and receiving the order.
2. Holding (carrying) costs: Cost to carry an item in inventory for a length of time, usually a year. Costs include Interest, insurance, taxes, depreciation, obsolescence, deterioration, pilferages, breakage, warehousing costs and Opportunity costs. Holding (carrying) costs: Holding costs are stated in two ways
   • Percentage of unit price or
   • Rupee
3. Ordering costs: Costs of ordering and receiving inventory. These are the actual costs that vary with the actual placement of the order.
4. Shortage costs: Costs when demand exceeds supply.



Read more: MGT613 - Production / Operations Management - Lecture Handout 32

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Related Content: MGT613 - VU Lectures, Handouts, PPT Slides, Assignments, Quizzes, Papers & Books of Production & Operations Management

TOTAL QUALITY MANAGEMENT

Total Quality Management is a philosophy that involves each and every individual in an organization in a continual effort to improve quality and achieve customer satisfaction.

The TQM Approach

TQM is not called philosophy for nothing. It is that common viewpoint as well as attitude shared by the whole organization that helps the organization achieves its prime objective of increase in revenue as well as a continuous relationship with the customer, by providing a quality based service which fulfills the customer’s needs and requirements.

If we apply the TQM approach we can identify the role played by various departments and interfaces of the organization. These roles at the functional and departmental levels if not in line with the organizational strategy would not allow the organization to pursue TQM.

TQM CRITICISMS

TQM Philosophy is often criticized for reasons which show weak implementation or poor management perspective. The common criticism against TQM is:

Read more: MGT613 - Production / Operations Management - Lecture Handout 25