Supply chain management
MANUFACTURING PROCESSES and BREAK-EVEN ANALYSIS
,
,Inventory Measures
•Total average value of inventory –The total investment in inventory at the firm
•Raw materials; Work-in-process; Finished goods
•Inventory turn –An efficiency measure where the cost of goods sold is divided by the total average value of
inventory
•Days-of-supply –A measure of the number of days of supply of an item (the inverse of inventory turn scaled to days)
Little’s Law
•The flow of items through a production process can be described using Little’s Law
•Inventory = Throughput rate ×Flow time
•Inventory –materials held by the firm for future use
•Throughput –long-term average rate that items are flowing through the process
•Flow time –time for a single unit to to completely flow through the entire process
,
MANUFACTURING PROCESSES and BREAK-EVEN ANALYSIS
,
,Inventory Measures
•Total average value of inventory –The total investment in inventory at the firm
•Raw materials; Work-in-process; Finished goods
•Inventory turn –An efficiency measure where the cost of goods sold is divided by the total average value of
inventory
•Days-of-supply –A measure of the number of days of supply of an item (the inverse of inventory turn scaled to days)
Little’s Law
•The flow of items through a production process can be described using Little’s Law
•Inventory = Throughput rate ×Flow time
•Inventory –materials held by the firm for future use
•Throughput –long-term average rate that items are flowing through the process
•Flow time –time for a single unit to to completely flow through the entire process
,
