Seasonal demand: demands varies periodically, but producers capacity is fixed.Lead time itself can be addressed by ordering that many days in advance. However, in practice, inventory is to be maintained for consumption during 'variations in lead time'. Time – The time lags present in the supply chain, from supplier to user at every stage, requires that you maintain certain amounts of inventory to use in this lead time.There are five basic reasons for keeping an inventory: 4.5 Theory of constraints cost accountingīusiness inventory Reasons for keeping stock. 2 Principle of inventory proportionality.1.2 Special terms used in dealing with inventory management.In the context of services, inventory refers to all work done prior to sale, including partially process information. In the context of a manufacturing production system, inventory refers to all work that has occurred – raw materials, partially finished products, finished products prior to sale and departure from the manufacturing system. The concept of inventory, stock or work in process (or work in progress) has been extended from manufacturing systems to service businesses and projects, by generalizing the definition to be "all work within the process of production - all work that is or has occurred prior to the completion of production". It is required at different locations within a facility or within many locations of a supply network to precede the regular and planned course of production and stock of materials. Inventory management is a discipline primarily about specifying the shape and placement of stocked goods. Inventory ( American English) or stock ( British English) refers to the goods and materials that a business holds for the ultimate goal of resale, production or utilisation.
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