1.Service parts sold to the repair shops are
examples of dependent demand.
Demand must be forecasted based on market conditions.
four broad categories of inventory are raw materials, work-in-process,
subassemblies, and finished goods.
turnover ratio shows how many times a firm turns over its inventory in an
accounting period. Faster turnovers are generally viewed as negative because it
indicates instability in the firm’s inventory level.
term Cycle Counting is synonymous with physically counting inventory.
ABC inventory control system categorizes inventory items into three groups, A,
B, and C. A items are given highest priority, while C items have the lowest
priority. Prioritization may be based on annual dollar usage, shelf life, or
Analysis is an inventory model used to determine the optimal order size that
minimizes total annual inventory costs.
ABC inventory matrix shows an ABC inventory classification based on annual
usage on the vertical axis and an ABC inventory classification based on
physical inventory on the horizontal axis.
Frequency Identification (RFID) is considered an eventual replacement of bar
code because of its ability to store huge amount of information to
differentiate specific unit of good.
Product Code (EPC) is the only RFID standard adopted by the commercial sector
and the U.S. Department of Defense.