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MGT613 - Production / Operations Management - Lecture Handout 31

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

INVENTORY MANAGEMENT

Learning Objectives

Our discussion on Inventory Management would be complete only when we are able to learn and understand the types of Inventories and objectives of Inventory Control. This would ensure that we are able to understand the major reasons for holding inventories. We would be able to differentiate between independent and dependent demand. We will also learn the requirements of an effective inventory management system. We will review both periodic as well as perpetual Inventory systems. We will discuss in detail the ABC approach with a suitable example. Since our discussion would extend over three lectures we will also discuss the objectives of inventory management, describe the basic EOQ model, Economic Run Size, Quantity Discount Model with solved examples.

Types of Inventories

The five common types of inventories are:

  1. Raw materials & purchased parts.
  2. Partially completed goods called work in progress.
  3. Finished-goods inventories:
    • (manufacturing firms) or
    • merchandise, (retail stores)
  4. Goods-in-transit to warehouses or customers.
  5. Replacement parts, tools, & supplies.

Objective of Inventory Control

To achieve satisfactory levels of customer service while keeping inventory costs within reasonable bounds. Operations Managers are well aware of the fact that customer services with respect to Inventory takes into account both the internal customers as well as external customers.

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CS605 - Software Engineering II - Lecture Handout 35

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Change Control Process

The first component of the change control process is the Change Control Authority (CCA) or a Change Control Board (CCB). A CCA or CCB includes people from both developer and client side.

Whenever a change is required, the CCB decides whether to allow this change to happen or deny it. If it is decided that a change is needed, an Engineering Change Order or ECO is generated. An ECO defines the change to be made, the constraints that must be respected, and the criteria for review and audit. The change control process thus involves the following steps.

Read more: CS605 - Software Engineering II - Lecture Handout 35