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Inventory control is a systematic approach to sourcing, storing, and selling inventory—both raw materials and finished goods—while ensuring optimal stock levels to meet customer demand without incurring excess costs. It involves balancing the costs of inventory with the benefits of holding inventory, ultimately aiming to minimize costs and maximize efficiency and service levels.
Relevant Degrees
Concept
Economic Order Quantity (EOQ) is a fundamental inventory management tool that determines the optimal order size to minimize total inventory costs, including ordering and holding costs. By calculating EOQ, businesses can efficiently manage stock levels, reduce waste, and improve cash flow by balancing the costs associated with ordering and storing inventory.
Concept
Just-In-Time (JIT) Inventory is a management strategy that aligns raw-material orders from suppliers directly with production schedules, minimizing inventory levels and reducing carrying costs. This approach enhances efficiency and reduces waste by receiving goods only as they are needed for production, which requires a highly responsive supply chain and precise demand forecasting.
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ABC Analysis is an inventory categorization technique used to prioritize items based on their importance, typically determined by their consumption value. By classifying items into three categories—A, B, and C—businesses can focus resources on the most critical items to optimize inventory management and improve operational efficiency.
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Safety stock is an additional quantity of inventory held to mitigate the risk of stockouts caused by uncertainties in supply and demand. It acts as a buffer to ensure that a company can continue to operate smoothly despite fluctuations in demand or delays in supply chain processes.
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The reorder point is the inventory level at which a new order should be placed to replenish stock before it runs out. It is crucial for maintaining optimal inventory levels, preventing stockouts, and ensuring smooth operations in supply chain management.
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Inventory turnover is a financial ratio that measures how many times a company's inventory is sold and replaced over a specific period, indicating the efficiency of inventory management. A higher turnover rate suggests strong sales or effective inventory management, while a lower rate may imply overstocking or weak sales performance.
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Demand forecasting is the process of predicting future customer demand for a product or service, which helps businesses make informed decisions about production, inventory, and sales strategies. Accurate Demand forecasting enables companies to optimize resources, reduce costs, and improve customer satisfaction by ensuring product availability and minimizing overstock or stockouts.
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Lead time is the duration between the initiation and completion of a process, often used to gauge efficiency in manufacturing, supply chain, and project management. It encompasses various stages such as order processing, production, and delivery, influencing inventory levels and customer satisfaction.
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A Stock Keeping Unit (SKU) is a unique identifier assigned to a product by a retailer to track inventory and sales. It helps in managing stock levels, analyzing sales patterns, and optimizing inventory management strategies for efficiency and profitability.
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A perpetual inventory system continuously updates inventory records for every transaction, providing real-time stock levels and financial information. This system enhances accuracy and efficiency in inventory management, allowing businesses to make informed decisions based on current data.
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Production scheduling is the process of organizing, optimizing, and controlling the production process to ensure that goods are produced efficiently, on time, and within budget. It involves allocating resources, setting timelines, and coordinating tasks to meet customer demand while minimizing costs and maximizing productivity.
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Vendor Managed Inventory (VMI) is a supply chain strategy where the supplier assumes the responsibility of managing and replenishing inventory for the buyer based on pre-established criteria. This approach enhances collaboration, reduces stockouts, and optimizes inventory levels, leading to improved efficiency and cost savings for both parties.
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Loss prevention is a strategic approach employed by businesses to minimize financial losses due to theft, fraud, or operational errors. It involves a combination of policies, procedures, and technologies to deter, detect, and respond to potential threats to a company's assets.
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Barcode scanning is a technology that uses optical sensors to read printed barcodes, translating the patterns into digital information that can be processed by computer systems. This technology is widely used in retail, logistics, and inventory management to streamline operations and improve accuracy in tracking and managing goods.
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Supply Chain Control involves the strategic oversight and management of the entire supply chain process to ensure efficiency, reliability, and responsiveness. It integrates various functions like procurement, production, and distribution to optimize performance and mitigate risks across the supply chain network.
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Distribution management involves overseeing the movement of goods from supplier or manufacturer to point of sale, ensuring timely delivery, cost efficiency, and customer satisfaction. It plays a critical role in supply chain management by optimizing logistics, inventory control, and transportation strategies to meet market demand effectively.
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Revenue management is a strategic approach used to optimize the financial results of a business by dynamically adjusting pricing and availability of products or services based on demand forecasting and market conditions. It is widely used in industries with fixed capacities, such as airlines and hotels, to maximize income by selling the right product to the right customer at the right time for the right price.
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Fashion merchandising involves the strategic planning, buying, and selling of fashion products to maximize sales and meet consumer demands. It combines elements of design, marketing, and retail management to ensure that the right products are available in the right place at the right time and price.
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Tare weight refers to the weight of an empty container or vehicle, which is subtracted from the gross weight to determine the net weight of the contents. This concept is crucial for accurate measurement and billing in industries such as shipping, logistics, and manufacturing, where precise weight calculations are essential for cost and inventory management.
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Vaccine storage is crucial to maintaining the efficacy and safety of vaccines, requiring strict adherence to temperature and handling guidelines. Proper storage prevents degradation and ensures that vaccines remain effective from the point of manufacture to administration.
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Asset inventory is a comprehensive list detailing all assets owned by an organization, including physical, digital, and intangible resources. It is crucial for effective asset management, risk assessment, and strategic planning, ensuring optimal utilization and security of resources.
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Drum-Buffer-Rope is a production scheduling methodology derived from the Theory of Constraints, designed to maximize throughput by synchronizing production around the system's bottleneck. It ensures that the bottleneck (drum) sets the pace of production, with a buffer to protect it from disruptions and a rope to control the release of materials into the system.
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Cargo sorting is a critical logistics process that involves organizing and categorizing goods for efficient transportation and delivery. It ensures that items are correctly routed, minimizing delays and reducing costs in the supply chain.
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Reservation management involves the systematic process of handling bookings, ensuring optimal allocation of resources, and enhancing customer satisfaction. It is crucial for maximizing occupancy and revenue in industries like hospitality, travel, and event planning while minimizing operational inefficiencies.
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Cargo handling involves the safe and efficient loading, unloading, and management of goods in transit, ensuring minimal damage and optimal use of space and resources. It requires coordination of various logistics processes and technologies to maintain the integrity and timely delivery of cargo across different modes of transportation.
A Computerized Maintenance Management System (CMMS) is a software solution designed to streamline maintenance management processes by automating tasks such as work order management, inventory control, and asset tracking. It enhances operational efficiency, reduces downtime, and extends the lifespan of equipment by enabling data-driven decision-making and proactive maintenance strategies.
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Asset control refers to the systematic process of managing, monitoring, and safeguarding a company's assets to maximize their value and ensure their optimal utilization. It involves implementing strategies and technologies to track asset location, condition, and performance, thereby minimizing risks and enhancing operational efficiency.
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Vendor-Managed Inventory (VMI) is a supply chain strategy where the supplier is responsible for maintaining the inventory levels of their products at the customer's location, optimizing stock levels and reducing the risk of stockouts or overstock. This approach enhances collaboration between suppliers and customers, leading to improved efficiency, reduced costs, and better service levels.
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Terminal management involves overseeing the operations and logistics of a terminal, ensuring efficient handling of goods and smooth flow of traffic. It requires coordination of various activities such as loading, unloading, storage, and transportation to optimize terminal performance and minimize delays.
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Equipment grouping is the process of categorizing machinery or tools based on shared characteristics or functions to optimize maintenance, inventory management, and operational efficiency. This approach is critical in industries such as manufacturing, construction, and healthcare, where it enhances resource allocation and reduces downtime by enabling systematic tracking and servicing of equipment.
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