Business Management: Decision Making Tools

Inventory Policies Inventory policies : inventory definition, stock classification, inventory control issues, continuous and periodic inventory review, order size What Is Inventory? Inventory (stock)  – materials in a supply chain or in a segment of a supply chain, expressed in quantities, locations and/or values, not used at present, but kept for the future use, consumption or sale (Krzyżaniak, 2009).

ABC Classification System The method essence Sanders mentioned that objects (items) in the supply chain are not of equal importance. Some are very important, and others are less important. For example, specialized surgical equipment is important for a hospital, while latex gloves are less important ( Sanders, 2013 ). ABC classification is a ranking system for identifying and grouping items in terms of how useful they are for achieving business goals. The ABC system classifies logistics object according to its size, volume, or cash value added to aggregate category of the firm (inventory or overall costs, turnover, etc.). Classifying inventory based on degree of importance allows us to give priority to important objects and manage those with care. It also prevents us from wasting precious resources on managing objects that are of less importance. In the context of inventory control, typically thousands of independent demand items are held in inventory by a company, espe...

Resilient Supply Chain Disruptions within Supply Chain Nowadays, organizations perceive Volatility as a systemic condition. They face with demand uncertainty, variability in orders, and maintaining inventory and with many disruptions at any time. When demand rises, organizations try to match it by increasing production or supplies. When demand slumps, they slow down processes to reduce cash outlays for network assets and inventory stocks. Risk events occur not only in the period of instability and often have unprecedented magnitude. The speed of changes is accelerating. During the period, when disruptions are taking place, the global supply chain is spreading impacts instantly among all the connected parties. Some of them may experience severe consequences caused by disruptions. Under these circumstances, the marketing, economic and financial results of organization are deteriorating.