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Operations Management: Sustainability and Supply Chain Management, Twelfth Edition
book

Operations Management: Sustainability and Supply Chain Management, Twelfth Edition

by Jay Heizer, Barry Render, Chuck Munson
February 2016
Intermediate to advanced content levelIntermediate to advanced
480 pages
219h 58m
English
Pearson
Content preview from Operations Management: Sustainability and Supply Chain Management, Twelfth Edition

Managing Inventory

Operations managers establish systems for managing inventory. In this section, we briefly examine two ingredients of such systems: (1) how inventory items can be classified (called ABC analysis) and (2) how accurate inventory records can be maintained. We will then look at inventory control in the service sector.

ABC Analysis

ABC analysis divides on-hand inventory into three classifications on the basis of annual dollar volume. ABC analysis is an inventory application of what is known as the Pareto principle (named after Vilfredo Pareto, a 19th-century Italian economist). The Pareto principle states that there are a “critical few and trivial many.” The idea is to establish inventory policies that focus resources on the few ...

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Publisher Resources

ISBN: 9780134422404