LINK:https://afifnurichwan.files.wordpress.com/2015/06/inventory-control-and-management-second-edition.pdf

CHAPTER 4 (Model for Known Demand)

Discussion questions

4.1 We have described some simple extensions to the economic order quantity, and could have looked at many more complicated models. When do you think that it is worth using a more sophisticated model, rather than using the guidelines given by a simple model?

4.2 We have looked at costs that vary in discrete steps, but how would you deal with costs that rise on a continuous sliding scale?

4.3 With a finite replenishment rate the order quantity is the economic order quantity multiplied by v (P/ (P - D)). As the replenishment rate gets closer to the demand rate, this value gets larger, and the order size and average stock level both increase. But if the replenishment rate is equal to the demand we should not need any stock. What is happening?

4.4 Nobody likes waiting for a product they have decided to buy, so why would an organization deliberately work with shortages?

4.5 It is often difficult to find reliable costs for stocks. With shortages this seems almost impossible - how do you find a cost for loss of goodwill or reduced future sales? Does this mean that any analysis of shortages is inevitably based on flimsy evidence?

4.6 Every organization thinks that its problems with inventories are unique. To what extent do you think they are right?

CHAPTER 5 (Models for Uncertain Demand)

Discussion questions

5.1 By definition, we cannot predict uncertain things. What, then, is the point of building models that contain uncertainty?

5.2 Service level models assume that we can define an acceptable level of service. But surely we should be aiming for perfect service, in the same way that Total Quality Management aims for perfect quality. Is this a major flaw in these models?

5.3 If we include shortage costs, we find that the optimal order quantity is higher than the EOQ. The reasoning is that orders are bigger to avoid shortages. But the EOQ calculation assumes that shortages are so expensive that they must never occur. Has some calculation gone wrong?

5.4 As they give lower stocks, fixed order quantity methods should be used whenever possible. Do you think that this is true?

5.5 What types of uncertainty are important in real inventory methods, but have not been included in the models we have described? How could we add these factors?

5.6 What features would you expect to see in a computerized inventory control package? Look at some commercial packages and compare the features they offer. (You can find information about many packages on the Web.)

5.7 If we kept removing the assumptions in our analyses we would end up with a model that would accurately describe the operations of any stocks. Admittedly this model might be quite complex, but an organization would simply have to substitute the appropriate values to find its best inventory policy. Is this a realistic view?