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Supply Chain Management: Inventory Management

Supply Chain Management : InventoryManagementDonglei DuFaculty of Business Administration, University of New Brunswick, NB Canada FrederictonE3B 9Y2 (UNB)SCM1 / 83 Table of contents I1 Introduction2 Inventory Management3 Inventory models4 Economic order quantity (EOQ)EOQ modelWhen-to- order ?5 Economic Production quantity (EPQ): model descriptionEPQ model6 The Newsboy Problem-Unknown demand (probabilistic model )The newsvendor model7 Multiple-period stochastic model : model description8 Managing Inventory in the Supply chainDu (UNB)SCM2 / 83 Section 1 IntroductionDu (UNB)SCM3 / 83 Outline I1 Introduce some basic concepts in Inventory managementInventory level (IL)Reorder point (ROP)Lead timeSafety stockContinuous review and periodic review systemsService level2 Introduce some basic Inventory models, both deterministic models1 EOQ model2 EPQ modelprobabilistic models1 Single-period model .

Economic Order Quantity (EOQ): Model descriptionI The EOQ model is a simple deterministic model that illustrates the trade-o s between ordering and inventory costs. Consider a single warehouse facing constant demand for a single item. The warehouse orders from the supplier, who is assumed to have an unlimited quantity of the product.

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