Inventory Management

These flashcards cover the key concepts, definitions, and features related to inventory management as discussed in the lecture notes.

Inventory

Refers to raw materials, work in progress, and finished goods that a business has on hand.

Inventory Management

The process of ensuring that businesses have enough inventory to meet production needs without incurring excess costs.

Maximum Inventory Level

The highest amount of inventory that can be stored at one time to avoid overstocking.

Minimum Inventory Level

The lowest amount of inventory that should be held to prevent production stoppage.

Reorder Level

The inventory level at which new stock is ordered to prevent running out.

Reorder Quantity

The amount of inventory that needs to be ordered to restore inventory levels to maximum.

Lead Time

The time taken from placing an order to receiving the inventory.

Buffer Inventory

Extra inventory held below the minimum level for emergency use.

Just-in-Time (JIT)

An inventory control method that keeps inventory levels to a minimum and ensures timely arrival of new stock.

Centralised Storage

A system where all inventory is stored in one central location to be distributed to various departments.

Decentralised Storage

A system where each department is responsible for its own ordering and storing of inventory.