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Safety Stock
Safety stock is a term used by logistics, logisticians to describe a level of extra inventory, stock which is maintained to mitigate the risk of stockouts, which can be caused, for example, by shortfalls in raw material availability or uncertainty in forecasting supply and demand. Adequate safety stock levels permit business operations to proceed according to their plans.Monk, Ellen and Bret Wagner. Concepts in Enterprise Resource Planning. 3rd Edition. Boston: Course Technology Cengage Learning, 2009. Safety stock is held when uncertainty exists in demand, supply, or manufacturing yield, and serves as an insurance against stockouts. Safety stock is an additional quantity of an item held in the inventory to reduce the risk that the item will be out of stock. It acts as a buffer stock in case sales are greater than planned and/or the supplier is unable to deliver the additional units at the expected time. With a new product, safety stock can be used as a strategic tool until the com ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Logistics
Logistics is the part of supply chain management that deals with the efficient forward and reverse flow of goods, services, and related information from the point of origin to the Consumption (economics), point of consumption according to the needs of customers. Logistics management is a component that holds the supply chain together. The resources managed in logistics may include tangible goods such as materials, equipment, and supplies, as well as food and other edible items. In military logistics, it is concerned with maintaining army supply lines with food, armaments, ammunition, and spare parts apart from the transportation of troops themselves. Meanwhile, civil logistics deals with acquiring, moving, and storing raw materials, semi-finished goods, and finished goods. For organisations that provide Waste collection, garbage collection, mail deliveries, Public utility, public utilities, and after-sales services, logistical problems must be addressed. Logistics deals with t ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Lead Time
A lead time is the latency between the initiation and completion of a process. For example, the lead time between the placement of an order and delivery of new cars by a given manufacturer might be between 2 weeks and 6 months, depending on various particularities. One business dictionary defines "manufacturing lead time" as the total time required to manufacture an item, including order preparation time, queue time, setup time, run time, move time, inspection time, and put-away time. For make-to-order products, it is the time between release of an order and the production and shipment that fulfill that order. For make-to-stock products, it is the time taken from the release of an order to production and receipt into finished goods inventory. Supply chain management A conventional definition of lead time in a supply chain management context is the time from the moment the customer places an order (the moment the supplier learns of the requirement) to the moment it is ready for de ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Business Terms
Business is the practice of making one's living or making money by producing or buying and selling products (such as goods and services). It is also "any activity or enterprise entered into for profit." A business entity is not necessarily separate from the owner and the creditors can hold the owner liable for debts the business has acquired except for limited liability company. The taxation system for businesses is different from that of the corporates. A business structure does not allow for corporate tax rates. The proprietor is personally taxed on all income from the business. A distinction is made in law and public offices between the term business and a company (such as a corporation or cooperative). Colloquially, the terms are used interchangeably. Corporations are distinct from sole proprietors and partnerships. Corporations are separate and unique legal entities from their shareholders; as such they provide limited liability for their owners and members. Cor ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Reorder Point
The reorder point (ROP), also reorder level (ROL) or "optimal re-order level", is the level of inventory which triggers an action to replenish that particular inventory. It is a minimum amount of an item which a firm holds in stock, such that, when stock falls to this amount, the item must be reordered. It is normally calculated as the forecast usage during the replenishment lead time plus safety stock. In the EOQ (Economic Order Quantity) model, it was assumed that there is no time lag between ordering and receipt of materials. Continuous review system The reorder point for replenishment of stock occurs when the level of inventory drops down to zero. In a model with instantaneous replenishment of stock the level of inventory jumps to the original level from zero level. In real life situations there is never a zero lead time: there is always a time lag from the date of placing an order for material to the date on which materials are received. As a result, the reorder point is alwa ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Buffer Stock Scheme
A buffer stock scheme (commonly implemented as intervention storage, the "ever-normal granary") is a price stabilization scheme in which surplus commodities are bought and stored for later sale during shortages, usually for an individual commodity market or an entire economy. Real-world examples The United States Strategic Petroleum Reserve stores 727 million barrels of crude petroleum, which is sold or lent during shortages. Two-price scheme Most buffer stock schemes work along the same rough lines: first, two prices are determined, a floor and a ceiling (minimum and maximum price). When the price drops close to the floor price (after a new rich vein of silver is found, for example), the scheme operator (usually government) will start buying up the stock, ensuring that the price does not fall further. Likewise, when the price rises close to the ceiling, the operator depresses the price by selling off its holdings. In the meantime, it must either store the commodity or othe ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Standard Normal
In probability theory and statistics, a normal distribution or Gaussian distribution is a type of continuous probability distribution for a real-valued random variable. The general form of its probability density function is f(x) = \frac e^\,. The parameter is the mean or expectation of the distribution (and also its median and mode), while the parameter \sigma^2 is the variance. The standard deviation of the distribution is (sigma). A random variable with a Gaussian distribution is said to be normally distributed, and is called a normal deviate. Normal distributions are important in statistics and are often used in the natural and social sciences to represent real-valued random variables whose distributions are not known. Their importance is partly due to the central limit theorem. It states that, under some conditions, the average of many samples (observations) of a random variable with finite mean and variance is itself a random variable—whose distribution conver ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Cumulative Distribution Function
In probability theory and statistics, the cumulative distribution function (CDF) of a real-valued random variable X, or just distribution function of X, evaluated at x, is the probability that X will take a value less than or equal to x. Every probability distribution Support (measure theory), supported on the real numbers, discrete or "mixed" as well as Continuous variable, continuous, is uniquely identified by a right-continuous Monotonic function, monotone increasing function (a càdlàg function) F \colon \mathbb R \rightarrow [0,1] satisfying \lim_F(x)=0 and \lim_F(x)=1. In the case of a scalar continuous distribution, it gives the area under the probability density function from negative infinity to x. Cumulative distribution functions are also used to specify the distribution of multivariate random variables. Definition The cumulative distribution function of a real-valued random variable X is the function given by where the right-hand side represents the probability ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Probit
In probability theory and statistics, the probit function is the quantile function associated with the standard normal distribution. It has applications in data analysis and machine learning, in particular exploratory statistical graphics and specialized regression modeling of binary response variables. Mathematically, the probit is the inverse of the cumulative distribution function of the standard normal distribution, which is denoted as \Phi(z), so the probit is defined as :\operatorname(p) = \Phi^(p) \quad \text \quad p \in (0,1). Largely because of the central limit theorem, the standard normal distribution plays a fundamental role in probability theory and statistics. If we consider the familiar fact that the standard normal distribution places 95% of probability between −1.96 and 1.96 and is symmetric around zero, it follows that :\Phi(-1.96) = 0.025 = 1-\Phi(1.96).\,\! The probit function gives the 'inverse' computation, generating a value of a standard normal ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Independent And Identically Distributed Random Variables
Independent or Independents may refer to: Arts, entertainment, and media Artist groups * Independents (artist group), a group of modernist painters based in Pennsylvania, United States * Independentes (English: Independents), a Portuguese artist group Music Groups, labels, and genres * Independent music, a number of genres associated with independent labels * Independent record label, a record label not associated with a major label * Independent Albums, American albums chart Albums * ''Independent'' (Ai album), 2012 * ''Independent'' (Faze album), 2006 * ''Independent'' (Sacred Reich album), 1993 Songs * "Independent" (song), a 2007 song by Webbie * "Independent", a 2002 song by Ayumi Hamasaki from '' H'' News media organizations * Independent Media Center (also known as Indymedia or IMC), an open publishing network of journalist collectives that report on political and social issues, e.g., in ''The Indypendent'' newspaper of NYC * ITV (TV network) (Independent Televi ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Forecast Error
In statistics, a forecast error is the difference between the actual or real and the predicted or forecast value of a time series or any other phenomenon of interest. Since the forecast error is derived from the same scale of data, comparisons between the forecast errors of different series can only be made when the series are on the same scale. In simple cases, a forecast is compared with an outcome at a single time-point and a summary of forecast errors is constructed over a collection of such time-points. Here the forecast may be assessed using the difference or using a proportional error. By convention, the error is defined using the value of the outcome ''minus'' the value of the forecast. In other cases, a forecast may consist of predicted values over a number of lead-times; in this case an assessment of forecast error may need to consider more general ways of assessing the match between the time-profiles of the forecast and the outcome. If a main application of the forecas ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Service Level
Service level measures the performance of a system, service or supply. Certain goals are defined and the service level gives the percentage to which those goals should be achieved. Examples of service level: * Percentage of calls answered in a call center * Percentage of customers waiting less than a given fixed time * Percentage of customers that do not experience a stockout * Percentage of all parts of an order being fulfilled completely *Use of a safety stock to ensure that a target percentage of orders can be met in full and on time.Aberdeen GroupAre Your Inventory Management Practices Outdated? published on 1 March 2005, accessed on 14 July 2024 The term "service level" is used in supply-chain management and in inventory management to measure the performance of inventory replenishment policies. Under consideration, from the optimal solution of such a model also the optimal size of back orders can be derived. A back order is an order placed for an item which is out-of-stock ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Reorder Point
The reorder point (ROP), also reorder level (ROL) or "optimal re-order level", is the level of inventory which triggers an action to replenish that particular inventory. It is a minimum amount of an item which a firm holds in stock, such that, when stock falls to this amount, the item must be reordered. It is normally calculated as the forecast usage during the replenishment lead time plus safety stock. In the EOQ (Economic Order Quantity) model, it was assumed that there is no time lag between ordering and receipt of materials. Continuous review system The reorder point for replenishment of stock occurs when the level of inventory drops down to zero. In a model with instantaneous replenishment of stock the level of inventory jumps to the original level from zero level. In real life situations there is never a zero lead time: there is always a time lag from the date of placing an order for material to the date on which materials are received. As a result, the reorder point is alwa ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
