Value-Based Inventory Management

The basic financial purpose of a firm is to maximize its value. An inventory management system should also contribute to realization of this basic aim. Many current asset management models currently found in financial management literature were constructed with the assumption of book profit maximization as basic aim. However these models could lack what relates to another aim, i.e., maximization of enterprise value. This article presents a modified value-based inventory management model.Comment: no coment

Value-Based Inventory Management

The basic financial purpose of a firm is to maximize its value. An inventory management system should also contribute to realization of this basic aim. Many current asset management models currently found in financial management literature were constructed with the assumption of book profit maximization as basic aim. However these models could lack what relates to another aim, i.e., maximization of enterprise value. This article presents a modified value-based inventory management model.inventory management, value-based management, free cash flow, working capital management, short-run financial management

Two notes on the joint replenishment problem under constant demand

Inventory Control;Inventory Models;management science

Inventory drivers in a pharmaceutical supply chain

In recent years, inventory reduction has been a key objective of pharmaceutical companies, especially within cost optimization initiatives. Pharmaceutical supply chains are characterized by volatile and unpredictable demands –especially in emergent markets-, high service levels, and complex, perishable finished-good portfolios, which makes keeping reasonable amounts of stock a true challenge. However, a one-way strategy towards zero-inventory is in reality inapplicable, due to the strategic nature and importance of the products being commercialised. Therefore, pharmaceutical supply chains are in need of new inventory strategies in order to remain competitive. Finished-goods inventory management in the pharmaceutical industry is closely related to the manufacturing systems and supply chain configurations that companies adopt. The factors considered in inventory management policies, however, do not always cover the full supply chain spectrum in which companies operate. This paper works under the pre-assumption that, in fact, there is a complex relationship between the inventory configurations that companies adopt and the factors behind them. The intention of this paper is to understand the factors driving high finished-goods inventory levels in pharmaceutical supply chains and assist supply chain managers in determining which of them can be influenced in order to reduce inventories to an optimal degree. Reasons for reducing inventory levels are found in high inventory holding and scrap related costs; in addition to lost sales for not being able to serve the customers with the adequate shelf life requirements. The thesis conducts a single case study research in a multi-national pharmaceutical company, which is used to examine typical inventory configurations and the factors affecting these configurations. This paper presents a framework that can assist supply chain managers in determining the most important inventory drivers in pharmaceutical supply chains. The findings in this study suggest that while external and downstream supply chain factors are recognized as being critical to pursue inventory optimization initiatives, pharmaceutical companies are oriented towards optimizing production processes and meeting regulatory requirements while still complying with high service levels, being internal factors the ones prevailing when making inventory management decisions. Furthermore, this paper investigates, through predictive modelling techniques, how various intrinsic and extrinsic factors influence the inventory configurations of the case study company. The study shows that inventory configurations are relatively unstable over time, especially in configurations that present high safety stock levels; and that production features and product characteristics are important explanatory factors behind high inventory levels. Regulatory requirements also play an important role in explaining the high strategic inventory levels that pharmaceutical companies hold

Inventory Management with product returns: the value of information

This paper evaluates the impact of misinformation for inventory systems with product returns. Ifone could exactly know how much is going to be returned and when, one would certainly benefitfrom incorporating this perfect information a priori in the management of production, inventory,and distribution. In practice, one has to attempt to forecast the timing and the amount of productreturns, by hypothesizing about the return flow properties. To do so, historic data on demandand returns can be used. The available literature on information and inventory managementwith product returns commonly 1) assumes known return probabilities; or 2) considers specificcases where the most informed method does not necessarily lead to the best performance,investigating the impact on inventory related costs.product returns;forecasting;information management;inventory management

Information logistics: A production-line approach to information services

Logistics can be defined as the process of strategically managing the acquisition, movement, and storage of materials, parts, and finished inventory (and the related information flow) through the organization and its marketing channels in a cost effective manner. It is concerned with delivering the right product to the right customer in the right place at the right time. The logistics function is composed of inventory management, facilities management, communications unitization, transportation, materials management, and production scheduling. The relationship between logistics and information systems is clear. Systems such as Electronic Data Interchange (EDI), Point of Sale (POS) systems, and Just in Time (JIT) inventory management systems are important elements in the management of product development and delivery. With improved access to market demand figures, logisticians can decrease inventory sizes and better service customer demand. However, without accurate, timely information, little, if any, of this would be feasible in today's global markets. Information systems specialists can learn from logisticians. In a manner similar to logistics management, information logistics is concerned with the delivery of the right data, to the ring customer, at the right time. As such, information systems are integral components of the information logistics system charged with providing customers with accurate, timely, cost-effective, and useful information. Information logistics is a management style and is composed of elements similar to those associated with the traditional logistics activity: inventory management (data resource management), facilities management (distributed, centralized and decentralized information systems), communications (participative design and joint application development methodologies), unitization (input/output system design, i.e., packaging or formatting of the information), transportations (voice, data, image, and video communication systems), materials management (data acquisition, e.g., EDI, POS, external data bases, data entry) and production scheduling (job, staff, and project scheduling)

Maintaining customer service in a fast food outlet

In a fast food outlet, a competitive field, customer service is a crucial factor. Customers are very much concerned about customer service and the quality of the food they get. This research is based on quality of service, inventory management, and employee training methods. Qualitative method is used for data collection for this project since it is more communicative and reliable. Data is collected from observations during work time. The store manager was interviewed for more information about inventory management of the store and customer service. This research found that not all the employees are trained for customer service. The inventory is done manually in the store, which is a time-consuming method. Not keeping sufficient stock leads to a shortage of toppings for pizza in the rush time if demand goes high, which may lead to customer complaints. Results of this research show that the standard of customer service and quality of food can be controlled and improved by managing the inventory, employee retention technique, and proper employee training. The research recommends using employee retention techniques and software methods for better inventory management. Keeping safe stocks as per the demand can reduce customer complaints about the quality of food.

Organic waste management studies : inventory in Juva

Two different organic waste management systems have been studied in the BERAS project. The most extensive study was of biowaste and nutrient flows in the community of Juva, Finland. The research methods used were waste flow and substance flow studies