Industrial Distribution - Purchasing Applications in Distribution

Flashcards covering key vocabulary terms related to inventory management and purchasing applications.

Inventory Management

The process of ordering, storing, and using a company's inventory.

Economic Order Quantity (EOQ)

The optimal order quantity that minimizes total cost while meeting demand without shortages.

ABC Analysis

An inventory categorization technique that divides items into three categories (A, B, and C) based on their importance.

Just-In-Time (JIT)

An inventory strategy to increase efficiency and decrease waste by receiving goods only as they are needed in the production process.

Holding Cost

The cost to hold or store inventory over a period of time.

Ordering Cost

The cost associated with placing and receiving orders for inventory.

Lead Time

The amount of time that passes from the initiation of a process until its completion.

Cycle Time

The period between two successive replenishments of inventory.

Total Inventory Cost

The sum of ordering costs and holding costs over a specified time period.

Annual Demand (D)

The total quantity of an item demanded over a year.