Final Exam

• inventory is an asset and can be converted into sales
• inventory is the only asset companies are trying to reduce
• cycle stock: stock you plan to cycle through based off predicted demands
• safety stock: buffer, just in case inventory you hold in case your cycle stock is incorrect
• anticipatory stock: invest in inventory because you anticipate there will be some kind of interruption 
• anticipatory stock is a forward buy of future cycle stock
• safety stock = (max daily usage*max lead time) - (avg daily usage*avg lead time)
• EOQ: as your number of products you buy at a time increase, your carrying cost goes up 
• EOQ equation: Q = sqrt(2DK/h)
• freezing: inventory records are inaccurate 
• inflating: more inventory on hand than records show