Scm 300 Module 2 (Davila) Study Guide Rated A+

Inventory Risk {Ans: carrying inventory is expensive and there's a risk. Not having enough inventory is a risk.}Reasons for Making Products {Ans: proprietary technology, no competent supplier, better quality control, idle capacity, control}Lead Time {Ans: the period of time between when an order is placed and when the order is received}MR (Materiel Requisition) {Ans: the document used to initiate the purchasing process. Filled out by intended user then sent to procurement office. It will list quantity, product/service description and/or specification}EOQ (Economic Order Quantity) Formula {Ans: optimal lot size}All 4 Costs of Inventory {Ans: cost to purchase, holding cost, ordering cost, and stockout cost}