What is inventory?, Inventory is the stock of raw materials, work-in-progress, and finished goods held by a business., Why do businesses hold buffer stock?, To reduce the risk of stockouts caused by unexpected increases in demand or delays in delivery., What is the reorder level?, The reorder level is the stock level at which a new order must be placed to prevent inventory running out., What is lead time?, Lead time is the time between placing an order and receiving the goods., What are inventory-holding costs?, Inventory-holding costs are the costs of storing and maintaining stock, including warehousing, insurance, and opportunity cost of capital., What are stockout (inventory-out) costs?, Stockout costs are the losses caused by running out of stock, such as lost sales and production delays., What is the Economic Order Quantity (EOQ)?, EOQ is the order size that minimises total inventory costs by balancing holding costs and re-order costs., What is Just-in-Time (JIT)?, JIT is an inventory system where materials and components arrive exactly when needed for production., What is one major risk of using JIT?, Production may stop if suppliers fail to deliver on time., What is supply chain management?, Supply chain management is the coordination of suppliers, production and distribution to reduce costs and improve efficiency.

INVENTORY MANAGEMENT

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