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Explain which inventory systems should be used in each situation - Assignment Example

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Inventory is the stock of any item or resource used in an organization while an inventory system is the set of policies and controls that monitor levels of inventory and determine what levels should be maintained, when stock should be replenished, and how large orders should…
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Explain which inventory systems should be used in each situation
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College: Registration Number: Lecturer: Inventory is the stock of any item or resource used in an organizationwhile an inventory system is the set of policies and controls that monitor levels of inventory and determine what levels should be maintained, when stock should be replenished, and how large orders should be.There are three major inventory system models that can be used to do the named tasks in the given situations. They include the single period model, fixed order quantity model and the fixed time period model. This definition is as given by Jacobs, F. R., & Chase, R. (2012) in their book, Operations and Supply Management the core, 3rd Edition
a. For the purposes of supplying my kitchen with fresh food, I would consider the fixed-time period model for my inventory system. This is because fresh food should be of constant supply in my kitchen and ready to use at any given time, hence I would order at certain intervals of time for example every weekend. It is also more convenient due to the different types of fresh food involved.
b. Obtaining a daily news paper is definitely more of a one-time purchase, thus i would apply the single-period model for my daily newspaper. This is because I would either receive the evening news paper once in a day or the morning news paper once in a day depending with my preference.
c. For the purposes of buying gas for my car i would prefer the fixed-order quantity model since I would like to maintain a given quantity of gas in my car at any given time. This quantity of gas is only eligible for refill when my car almost runs out of the quantity I purchased earlier so as to reduce my level of stocking out.
The item in my list with the highest stock out cost is buying gas for my car. This is because I would only want to maintain gas quantity in my car to a certain level with a given quantity so that i would monitor it to a level that the stock out risk is great enough for me to order a refill.
Reference:
Jacobs, F. R., & Chase, R. (2012) , Operations and Supply Management the core, 3rd Edition Read More
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