Page 149 - FM Integrated WorkBook STUDENT 2018-19

Chapter 8

Working capital management – Inventory

control

Outcome

By the end of this session you should be able to:

 explain the objectives of inventory management

 define and explain lead time and buffer inventory

 explain and apply the basic economic order quantity (EOQ) formula to data
provided

 calculate the EOQ taking account of quantity discounts and calculate the
financial implications of discounts for bulk purchases

 define and calculate the re-order level where demand and lead time are known

 describe and evaluate the main inventory management systems including Just-
In-Time (JIT) techniques

 suggest appropriate inventory management techniques for use in a scenario

and answer questions relating to these areas.

The underpinning detail for this Chapter in your Integrated Workbook can
be found in Chapter 8 of your Study Text

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