Inventory

The Inventory indicates the number of FLOW UNITS in the process at a given moment in time.

Generally it is expressed in UNIT with the letter “I”.

 

 

Using Little’s Law, INVENTORY can be calculated with the following equation:

I=R*T

There are several COSTS associated with inventory:

  • Ordering Cost;
  • Setup Cost;
  • Holding Cost;
  • Shortage Cost.

Let’s PRACTICE!

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