1. Chapter 9
Inventory management

2. Figure 9.1 Inventory management is the activity of planning and controlling accumulations of transformed resources as they move through supply networks, operations and processes

3. Figure 9.2 Inventory is created to compensate for the differences in timing between supply and demand

4. Figure 9.3 Inventory management has a significant effect on return on assets

5. Figure 9.4 Inventory profiles chart the variation in inventory level

6. Figure 9.5 Two alternative inventory plans with different order quantities (Q)

7. Figure 9.6 Inventory-related costs minimise at the ‘economic order quantity’ (EOQ)

8. Figure 9.7 Inventory profile for gradual replacement of inventory

9. Figure 9.8 Re-order level (ROL) and re-order point (ROP) are derived from the order lead time and demand rate

10. Figure 9.9 Safety stock(s) helps to avoid stock-outs when demand and/or order lead time are uncertain

11. Figure The probability distributions for order lead time and demand rate combine to give the lead-time usage distribution

12. Figure 9.11 Pareto curve for items in a warehouse