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Flashcards covering key supply chain management calculations and inventory strategies including Order Cycle Time, ABC Analysis, EOQ, JIT, and VMI.

Order Cycle Time

The total time required to process an order, including stages such as processing ($5\text{ days}$), production ($3\text{ days}$), and delivery ($2\text{ days}$), totaling $10\text{ days}$ in this scenario.

ABC Analysis ("C" items)

A category of inventory items that typically account for a high percentage of total items (e.g., $50\%$) but a low percentage of total inventory value (e.g., $5\%$). For a total inventory of $\$50,000$, these items would value $\$2,500$.

Economic Order Quantity (EOQ)

A formula used to determine the optimal order size; for instance, with an annual demand of $10,000\text{ units}$, an ordering cost of $\$100$, and a holding cost of $\$2\text{ per unit per year}$, the EOQ is $1000\text{ units}$.

Just-In-Time (JIT) Order Quantity

An inventory strategy where the amount to order is calculated based on lead time and average daily sales; for a lead time of $14\text{ days}$ and sales of $300\text{ units per day}$, the order quantity is $4,200\text{ units}$.

Vendor-Managed Inventory (VMI)

A supply chain system where the vendor is responsible for maintaining inventory levels; for example, if the current level is $800\text{ units}$ and the desired level is $1,200\text{ units}$, the vendor provides a delivery of $400\text{ units}$.