Jun 072017
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Inventory Management

Inventory Carrying Costs associated with carrying inventory include:

  • Interest on Capital Costs – this is the largest component of carrying cost and is associated with money tied up.
  • Taxes & Insurance – insurance and taxes has to be paid on the current inventory.
  • Obsolescence & Depreciation – inventory obsolescence is a major issue with products with a short shelf life or lose value over time (computer products).  Companies involved with products that become obsolete quickly should be focusing on decreasing cycle times.
  • Storage – the cost associated with having a facility to hold the inventory.
  • Opportunity Cost – what could the capital be used for that is tied up in inventory.

Costs of running out of inventory:

  • Loss of customer/sale
  • Bad reputation
  • Disruption in supply chain


Carrying Cost = (Price per unit * Carrying cost percentage * Order Quantity in Units)/2


Average Inventory = EOQ/2 + safety stock


  • Demand is known and is constant

  • No quantity discounts


Reorder point = Estimated Demand * Lead Time

Inventory Management Training.

Inventory Management

Apr 212017
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What Is Inventory Management?

Here are the basics to inventory management.  Visit this LinkedIn discussion for further inventory conversation.

Inventory Management and Supply Chain Training.

inventory management


Apr 212017
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How Apple’s Inventory Management is So Lean

Steve Jobs brought in Tim Cook, Apple’s current CEO, to improve the supply chain.  Tim Cook did such a cook job with Apple’s Inventory Management he became Apple’s CEO.

Supply Chain Information.

Jan 012017
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What Take a tour of an Amazon fulfillment center and see how our Associates receive your inventory from your inbound shipments. You will also learn what happens when your shipments are missing vital prep, labels or packaging or are otherwise not e-Commerce ready.

Supply Chain Information.

Oct 302016
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Supply Chain Inventory Optimization

Supply Chain Inventory Optimization is key for any organization that truly wants to have a world class supply chain.   In an ideal environment inventory would appear instantly at the time to satisfy demand.  This would be optimal.  This is where the concept of Just In Time (JIT) inventory comes into play.

Supply Chain Information.

  • “Why not make the work easier and more interesting so that people do not have to sweat?  The Toyota style is not to create results by working hard. It is a system that says there is no limit to people’s creativity. People don’t go to Toyota to ‘work’ they go there to ‘think’.”  ~ Taiichi Ohno, father of the Toyota Production System (TPS)
  • “All we are doing is looking at the time line, from the moment the customer gives us an order to the point when we collect the cash. And we are reducing the time line by reducing the non-value adding wastes.” ~ Taiichi Ohno

Supply Chain Inventory Optimization

Mar 122016
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From Youtube.com: Supply chain management and logistics encompasses all the activities involved in getting products to consumers including planning, storing, moving, and accounting for inventory. Inventory availability is the most important aspect of customer service, and the cost of inventory is one of the most important entries on a company’s balance sheet. The webinar discussed maintaining levels of inventory necessary to provide customer service while minimizing inventory resulting from poor supply chain management.