Question 1:
a) In which circumstance Forecasting Technique might be used as a method of the managing inventory?
b) Forecasting of future demand for inventory should be worked out as accurately as possible. Explain three impacts of inaccurate forecasting. Describe your answers.
c) Classifying Inventory as A-class items, B-class items and C-class items helps Inventory Managers in devising suitable control strategies for each class of items:
- Propose one control strategy for each of the three classes of ABC classifiction.
- State two limits of ABC Analysis as an Inventory Management Tool.
Question 2:
a) ‘Unnecessary Inventory’ has been recognized as one of the seven wastes in supply chains. Propose four ways of minimizing ‘Unnecessary Inventory’.
b) Stock Holding Costs and Ordering Costs are two of the major components of Total the Cost of Acquisition of Inventory
- Describe the meaning of each cost.
- List five cost elements of Stock Holding Costs.
- For each cost element listed, propose one cost reduction strategy.
c) Standardization of stock items leads to the potential cost savings. Describe three ways in which cost savings can be accomplished via standardization
Question 3: Write brief notes on each of the given:
a) Economic Order Quantity (EOQ)
b) Benchmarking
c) Stock-out Cost
d) Re-order Point System of Replenishment
e) Buffer Stock