PRODUCTION AND INVENTORY MANAGEMENT
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Introduction This paper presents a discussion of production and inven tory management. Inventory control is concerned with the plan ning, organization, and control of materials management, pro duction, stocking, and distribution (Magee, and Boodman, 1989). In the early 1990s, both economic and industrial environments are dynamic. Thus, inventory control practices and procedures must be capable of supporting effective decision making in these dynamic environments.Inventories: Definition and Need for Control The American Production and Inventory Control Society defines inventories as stock keeping items, held at stocking points, and serving to decouple successive operations in a manufacturing or distribution process (Fogarty, and Hoffmann, 1983). Inventories may also be defined in an accounting con text, as "the aggregate of those items of personal property which are (1) held for sale in the ordinary course of business, (2) in the process of production for later sale, or (3) held forcurrentconsumption in the production ofgoods and services . . . for sale" (Meigs, and Meigs, 1983, 110). Inventories may be comprised of tangible goods, such as aircraft parts, or of intangible services, such as airline tickets. What is signifi cant, in this context, is that the goods and services be owned by the entity possessing the inventories. Inventory management and control is an important m
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d. Some, such as subjective opinion forecasts, are not suitable for use with contemporary computer applications. A somewhat more sophisticated forecasting procedure which may be used with computer applications is the index based forecast. Unfortunately, these forecasts are "as good or as bad as the index that serves as its foundation and the degree of correla tion between the actual demand and the forecast based on the index" (Biegel, 1989,p. 147).
The best forecasts are those developed through the appli cation of statistical procedures. Among the major statistical forecasting procedures are the following (Biegel,1989):
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1. Trend line projections, which are developed through the use of regression equations.
2. Cyclic demand projections, which consider random variations, and which require the use of multiple regression equations.
3. Curvilinear regression projections, which consider multiple relationships among many variables.
4. Exponentially weighted moving average projections, which are valid only for short term projections.
Inventories form "a buffer zone between production or pro curement on the one side and sales or usage on the other" (Chambers, 1989, p. 28). Thus, "the effectiveness of any inventory m
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Some common words found in the essay are:
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Approximate Word count = 2015
Approximate Pages = 8 (250 words per page)
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