Page 272 - DMGT501_OPERATIONS_MANAGEMENT

Operations Management

Notes 4. ........................ are often executed with vendors, with penalty clauses, for the continuous
supply of these materials.

5. ........................ that provide excellent service levels are justified for A class items.
6. ........................ costs for Class B items should be moderate to low, and buffer stocks should
provide adequate control for stock outs, even though the ordering may occur less often.
7. ........................ items account for the bulk of inventory items.
8. All Class ‘A’ items require ........................ control.

9. Material items are classified based upon their ........................, demand patterns and supply
reliability etc.
10. The ........................ is based on the criticality of the inventory item

12.6 Review Questions

1. Discuss the concept of ABC classification.
2. What do you understand by ABC Analysis of Chest of Drawers?

3. What are the other types of classification used in the monitoring of inventory?
Answers: Self Assessment

1. Vilfredo Pareto 2. ABC classification

3. large rupee volume 4. Contracts
5. Buffer stocks 6. Stock out
7. Class C 8. Close

9. Commercial importance 10. VED Classification
12.7 Further Readings

Jones, T.C., and Riley, D.W., 1985, Using Inventory for Competitive Advantage through
Supply Chain Management, International Journal of Physical Distribution and
Materials Management 19(8), 3-8.
Krajewski and Ritzman, Operations Management, Strategy and Analysis, Pearson
Education, 2002.
Melnyk, S. and D. Denzler, Operations Management: A Value Driven Approach,
McGraw-Hill, 1996.
Vonderembse, Mark, White, Gregory, Operations Management, Concepts, Methods
and Strategies, John Wiley & Sons, 2004.

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