4 OPERATIONS & PROJECT MANAGEMENT - 4.3 Inventory Management

Question 1

Define Inventory

Answer 1

The materials and goods used for the production and supply

Question 2

Define Raw Material

Answer 2

As production increases this material is used to meet the increase in demand

Question 3

Define WIP

Answer 3

This is the Interim stage between raw materials and finished goods

Question 4

Define Finished Goods

Answer 4

These are products that have undergone the full production process

Question 5

What are the Inventory Levels?

Answer 5

1. Buffer
2. Re-order
3. Lead Time

Question 6

Define the Buffer Levels

Answer 6

The minimum inventory level that is allowed to prod. To continue with delays

Question 7

Define Re-order Levels

Answer 7

Units that are ordered every time this re-order level is reached

Question 8

Define Lead Time

Answer 8

The time period between the delivery and the new stock order

Question 9

Define Just-in-Time Inventory Management (JIT)

Answer 9

This system avoids holding inventory by having goods to arrive just as they are needed for production and to have products completed to order