Requirements for Effective Inventory Management
A system to keep track of the inventory on hand and on order
A reliable forecast of demand, including forecast error
Knowledge of lead times and variability
Estimates of holding, ordering and shortage costs
Classification system for inventory
Source: Stevenson, William J. (2005). Operations Management, 8th ed. McGraw-Hill Irwin. Page 486.
- 4/27/2004 -