The minimum inventory are to control limit in a stock control system that indicates at which point a replenishment order should be placed to avoid depleting the safety stock. In this business, minimum inventory are 18 units would be used per week. Actually the demand may fluctuate from period to period. If, therefore the usage per week at anytime goes beyond 18 units per week, the company will be out of stock for some time. Hence, raises the need for providing for some safety stock for example some minimum or buffer as inventory as a cushion against such stock outs.
Subscribe to:
Post Comments (Atom)
No comments:
Post a Comment