Chapter 4. Inventory Planning and Control

In most goods and many service organizations such as restaurants, after arriving at a short to medium term forecast, we need to figure out how much we want to produce or purchase and when to order or produce it (Figure 4.1).

Figure 4.1. Typical Planning and Scheduling Process

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This decision is accomplished by determining the current inventory position which measures an SKU’s ability to satisfy future demand. The current inventory position includes scheduled receipts, which are production (or purchase) orders that have been placed but have not yet been received, plus on-hand inventory minus any open customer ...

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