Operation management

ABC analysis
1. Pareto Principle (80 / 20)
  1. Class A : Higher
  2. Class B : Medium
  3. Class C : Lower
2. Establish inventory turnover policies
Cycle counting
1. Eliminates interruptions on production
2. Eliminates annual inventory accuracy
3. It's easy to identified errors
4. Reliable inventory records
EOQ model
1. "D" constant and independent
2. "L.T" constant
3. Inventory arrive inmediaty
4. Without quantity discounts
5. Variable cost just setup and holding
6. Stockout avoidable
Reorder point and safety stock
1. Service level wanted
2. Prevent stockout
Production order quantity model
1. When inventory builds up
2. Produced and sold at the same time
Quantity discount model
1. Large quantities = Discounts
2. Interaction between: Reduced product cost - Increased holding cost
Probabilistic inventory model
1. When demand is uncertain
INVENTORY
1. One of the most expensive assets
2. Functions of inventory
  1. Separate parts of the production process
  2. Decouple fluctuations in demand
  3. Advantage of quantity discounts
  4. To avoid inflation
3. Types of inventory
  1. Raw material
  2. Work in process
  3. Maintanace / repair / operating
  4. Finished goods
4. Independent demnad
  1. The demand is conditioned for other item
5. Dependent demand
  1. The demand is not conditioned for other item
Costs
1. Holding
2. Ordering
3. Setup

Resource summary

	Created by Daniel Echeverry almost 4 years ago