As described previously on 10 strategic decisions about operations management, inventory management is one of them. Inventory management focuses on planning and control of finished goods, raw materials, purchased parts, work-in-progress dan retail items.
Inventory Classification :
1). Based on the shape.
- Raw materials or purchased parts.
- Partially completed goods, called “work-in-progress (WIP)”.
- Finished goods inventories (manufacturing organizations).
- Merchandise (retail organizations).
- Replacement parts, tools and supplies.
2). Based on its function
- Pipeline/transit inventory
- Cycle stock
- Safety syock
- Anticipation stock
3). Based on the nature of dependence (independent vs dependent demand)
- Independent demand : Requests for items that do not depend on other items or the final product.
- Dependent demand : Demand for item number depending on the final product / other items.