Scribd
Upload
15 views26 pages

Planning and Replenishment Concepts

This document discusses tying SKUs and location addresses together through cartesian coordinates. It instructs to: 1. Create a cartesian coordinate system and plot 40 SKUs from your supermarket on it. 2. Clearly mark each SKU with an identifier and location address. 3. Present the output, which would list each SKU and its plotted location on the cartesian coordinates. The objective is to properly map SKUs to their storage locations.

Uploaded by

tendummyme
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPT, PDF, TXT or read online on Scribd
15 views26 pages

Planning and Replenishment Concepts

This document discusses tying SKUs and location addresses together through cartesian coordinates. It instructs to: 1. Create a cartesian coordinate system and plot 40 SKUs from your supermarket on it. 2. Clearly mark each SKU with an identifier and location address. 3. Present the output, which would list each SKU and its plotted location on the cartesian coordinates. The objective is to properly map SKUs to their storage locations.

Uploaded by

tendummyme
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPT, PDF, TXT or read online on Scribd
You are on page 1/ 26

 This is about Tying Together SKUs and

Location Addresses

 1) You need to create a Cartesian Coordinates in tying up SKUs and their addresses
 2) List down 40 SKUS that can be found in your supermarket layout (based on your CLS
Assessment)
 3) For those 40 SKUs , make sure to clearly mark them with an SKU identifier ( ex. Sprite
PET Bottles 12 X 1.5L)
 4) Plot each SKU on your cartesian coordinates
 5) Final output: Would look like this: Draw the cartesian. then list down the 40 SKUs and
their addresses

 Ex.

 "List of SKUs" Address


 1) Sprite PET Bottles 12 X 1.5L A02C -third layer of Rack

Clearly mark items with an SKU
identifier
Clearly Mark Location Addresses On Bins/Slots/Shelves/Racks/Floor
Locations/Drawers
Students to Present their Output
Learning Outcomes
The objective of this chapter is to provide basic
approaches to forecasting inventory levels and to
undertaking stock replenishment.

With the proper techniques, you will have the right


item, in the right quantity, at the right time, and in
the right place.
Replenishment Costs
It costs money to buy things. That sounds absurdly
simple when you first read it. However, the cost of
purchasing product exceeds the actual price paid for
it. Expenses related to purchasing include the salaries
of the purchasing staff, rent, and other overhead
expenses attributable to the purchasing department
Inventory Types
Independent Demand Inventory
Dependent Demand Inventory
Independent Demand
Inventory
Independent demand is influenced by market
conditions outside the control of your organization’s
operations.

Independent demand calls for a replenishment


approach to inventory management. This approach
assumes that market forces will exhibit a somewhat
fixed pattern. Therefore, stock is replenished as it is
used in order to have items on hand for customers.
Reorder Point (ROP)
The ROP is the lowest amount of an item you will
have on hand and on order before you reorder.

(Usage x Lead Time) + Safety Stock = ROP


In the above formula lead time is shown as a
percentage of a month, as follows:
1 week = 0.25 = 25% 4 weeks = 1.00 = 100%
2 weeks = 0.50 = 50% 5 weeks = 1.25 = 125%
3 weeks = 0.75 = 75% 6 weeks = 1.50 = 150%
Example 1:
Assume:
• Usage rate of 1,200 items per month
• Lead time of 3 weeks
Forecast @ 3 Like Days
Dec 25 ( Saturday)??

Dec 4 – 1020 units sold


Dec 11 – 1132 units sold
Dec 18 – 1221 units sold
Economic Order Quantity
(EOQ) Formula
The EOQ model is based on several assumptions:

• the demand rate is constant (no variations), recurring,


and known.

• the carrying cost and ordering cost are independent of the


quantity ordered (no discounts).

• the lead time is constant and known. Therefore, the


ordering times given result in new orders arriving exactly
when the inventory level reaches zero.
The Economic Order Quantity (EOQ) formula helps to
avoid these mis-stocking situations. It calculates the
ideal number of units you should order, such that
the cost involved is minimal and number of units is
optimal.

Also referred to as 'optimum lot size,' the economic


order quantity, or EOQ, is a calculation designed to
find the optimal order quantity for businesses to
minimize logistics costs, warehousing space, stockouts,
and overstock costs
Dependent Demand Inventory
Materials Requirements Planning
 Dependent demand calls for a requirements approach. When
an assembly or finished item is needed, then the materials
needed to create it are ordered. There is no fixed pattern because
an assembly created in the past may never be produced again

Dependent demand systems, however, are manufacturing oriented. The


objective of dependent demand inventory control is to support
the master production schedule. Even if you have a low stock
level of an item, it won’t be ordered unless and until it is needed
to produce something for the master schedule
Just-In-Time (JIT) Inventory
Systems
Today JIT has come to mean producing with a minimum of
waste. “Waste” is used in the broadest sense and includes
any
nonvalue adding activities. For example, storing, inspecting,
and counting materials doesn’t change the items; therefore,
those actions add no value
JIT goes further than MRP, because you control not only
the right item, in the right quantity, at the right time, but you
also bring that SKU to the right place. Under this time-based
concept, an item appears exactly when it is needed—not before,
not after.

Inventory—stock simply sitting around does no one any


good.
end

You might also like