Page 126 - DMGT525_MATERIALS_MANAGEMENT

Unit 8: Inventory Management

Vendor Development: Vendor Development can be defined as any activity that a buying firm Notes
undertakes to improve a supplier’s performance and capabilities to meet the buying firms’
supply needs.

8.7 Review Questions

1. Define inventory.
2. Mention the different types of inventory costs. Explain them with a diagram.

3. Write a short note on stock out costs.
4. What are the primary functions of inventory management?
5. What is re-order level?
6. Explain EOQ.
7. Briefly describe EOQ Model with Purchase Discount.

8. What are the Steps for calculating EOQ with purchase discount?
9. Explain Fixed order period model with the help of a diagram.
10. What is safety stock and optimum level of safety stock?

Answers: Self Assessment

1. Stocks 2. Productivity

3. Holding 4. Replenishing
5. Shortage 6. Demand
7. Re-order 8. Lead Time
9. Additional 10. EOQ

11. Economic Order Quantity 12. P-system
13. Replenishment 14. Safety Stock
15. Minimize

8.8 Further Readings

Books Ramakrishnan. R V, Tony Arnold. J R (2007). “Introduction to Materials Management”.
Pearson
K. Shridhar Bhat, “Production and Materials Management”. Himalaya Publishing
House

Chary. S.N., “Production and Operations Management”. Tata McGraw Hill
Gopalkrishanan. P, Sundaresan. M, “Materials Management: An Integrated Approach”.
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