OM SEMIS

Inventory

refers to the goods and materials that a business holds for the purpose

of resale, production, or use in operations.

Raw Materials

materials used in the production process

Work in progress (WIP)

Products that are partially completed during production

Finished Goods

Completed products ready for customer

Maintenance Repair, and Operations (MRO)

Items used to support operations such as tools and separate parts

Supply Chain

the network of organizations, people, activities, information,

and resources involved in producing and delivering a product to the customer.

Suppliers

Provide raw materials

Manufacturers

Convert raw materials into finished goods

Distributors

Transport and store products

Retailers

Sell products to customers

Customers

Final consumers of the product

Economic Order Quantity

a mathematical model used to determine the

optimal number of units a company should order each time it replenishes

inventory.

Ordering Cost

Expenses related to placing and receiving orders

Holding cost

Cost of storing inventory

Reorder Point

Indicates the inventory level at which a new order must be placed to avoid stockouts

Average Inventory

represents the typical level of inventory maintained by a

company.

Inventory Control Systems

help businesses track, manage, and monitor inventory

levels.

Perpetual Inventory System

Inventory records are updated continuously whenever a transaction occurs

Periodic Inventory System

Inventory is counted at specific intervals, such as monthly or quarterly.

Retail Sector

use automated inventory systems connected to suppliers to monitor stock levels.

Manufacturing Sector

must track raw materials such as wood, nails,

and varnish to ensure production continues without delays.

E-Commerce

must maintain accurate inventory records to

prevent selling products that are already out of stock.