the min-max approach to inventory management is a …

the min-max approach to inventory management is a …

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1、GordonGrahamNotesWhyDoDistributorsNeedaGoodInventorySystem?qMostdistributorscarry30to40percentmoreitemsanddollarsininventorythantheyneed!Usage–TheMostImportantElementofInformationqUSAGE!!!Thesinglemostimportantpredictionadistributormakesishowmuchofastockitemwillbeusedint

2、hefuture.Usedforinventorycontrolpurposes,meansallwithdrawalsfromstockataspecificcompanylocationinsalestocustomers,replenishmentofotherbranches,andinternalcompanyneeds.Typicallydefinedasanaveragenumberpermonth.qFor80%ofyourstockitems,themonthlyusagerateismostaccuratelydev

3、elopedbyselectingthelast6monthsofhistory,totalingfigures,anddividingbysix.qSeasonalitems:Foreveryprinciple,thereareexceptions.Anitemisseasonalwhen80%oftheannualsalesvolumefallsinsix(orless)consecutivemonths.qNon-recurringtransfersfromonebranchtoanothershouldnotbecounted.

4、qSafetyallowanceiscalculatedonlyontheregularsales.qConditionsthatshouldcausehistorydisqualification:oUnusualsalesortransfersinamonth.oStockoutsthatlastaslongas2weeksduringamonth.oItemswithonlyasinglecustomer,orwhereonecustomerdominatesthesales.oItemswithverylowsalesperye

5、ar(lessthan½unitpermonth.)qThese4conditionsaccountfor95%oftheheadachesininventorycontrolofstockeditems….butarefoundatanyonetimeinonlysome20%orlessoftheitemsinstock.qThecomputerinsertsaflagtodisqualifythehistory.oTherule:Whenthelastmonth’spostedhistoryisequaltothetotaloft

6、heprevious5month’sfigures,thelastmonthshowedatleast5unitssold,andtheitemunitcostissignificant.MoreInformationRequiredForGoodInventoryControlq“K”Factor=Totalannualcosts/avginventoryvalue.Thisfactorrepresentsthehandlingcostsforinventory.Thematerialhandlingexpensetotalomits

7、thoseactivitiesthatcouldbelabeledsales-generated…..thepicking,packing,andshipping/deliver.Itdoesincludeallpeople,functionsandexpenseinbringinginmaterialandputtingitaway,uptothepointthattheorder-fillingfunctionstarts.Formostdistributors,theexpensesegmentstoincludeareabout

8、60%ofthetotalwarehouseanddeliveryexpensesforayear.qForashortcutinfiguringoutyour“K”factor,simplyadd20%t

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