A number of terms are listed below:
Backflush costing.......... Carrying costs
Economic order quantity....... Enterprise resource planning (ERP)
Inventory management....... Just-in-time (JIT) production
just-in-time (JIT) purchasing...... Lean production
Ordering costs........... Purchasing costs
Reorder point safety stock....... Shrinkage costs
Stockout costs............ Synchronous tracking
Select the terms from the above list to complete the following sentences.
Supply-chain strategy decisions determine __________________activities. Managing inventory involves the identification of three relevant costs, ________________, ______________ and ______________. One strategy of _____________________ will match to a production decision of _________________ or __________ ____________ production. This JIT purchasing strategy will minimize _______________ of inventory and reduce or eliminate both __________ and __________ but may increase ________ costs. The goal of the management team is to minimize the overall combination of costs associated with inventory management. Any inventory management model requires careful analysis to identify the _______ _____, the economic __________ _____ ________ and the _____ _____. The management team requires high- quality information in a database of the type found in __________ _________ ________ systems.
ERP systems are demand-pull systems. Implementing a good demand-pull system requires a
highly coordinated information flow that supports lean production. Lean production (JIT) can eliminate inventory and therefore _________ _______ is appropriate. With no WIP or materials inventories, the need for sequential or ___________ ________ of costs of production through the inventories is no longer necessary. Instead _______ ______ are identified such as materials purchase and completion of unspoiled finished goods. Costs transfer at only these two trigger points from the Direct Materials to the Finished Goods inventory.