CPIM BSCM__v3_0_VC（課堂PPT）

1、6 1Aggregate Inventory ManagementAPICS Certified in Production and Inventory Management (CPIM)Session 6Basics of Supply Chain ManagementCh 96 2Basics of Supply Chain ManagementIntroduction to Supply Chain ManagementAggregate Inventory ManagementDemand ManagementItem Inventory ManagementCapacity Mana

2、gement and Production Activity ControlTheory of Constraints and Review ActivityMaterial Requirements PlanningLean/JIT and Quality SystemsMaster PlanningPurchasing and Physical Distribution..9.10.6 3Learning ObjectivesRecognize at least five different classes of inventory Explain six fu

3、nctions of inventoryIdentify three objectives of aggregate inventory managementDetermine the five types of inventory costsExplain the relationship between assets, liabilities, and owners equity on the balance sheetExplain financial statements and their relationship to aggregate inventoryCalculate in

4、ventory turns and days of supply measurementsUpon completion of this session, participants will be able to:6 4Introductionto InventorySession 6Aggregate Inventory Management6 5What is Inventory?“Those stocks or items used to support production, supporting activities, and customer service” APICS Dict

5、ionaryActivityClasses of InventoryProductionRaw materials and WIPOperationsMaintenance, repair, and operating suppliesCustomer serviceFinished goods, repair parts, spares6 6Aggregate Inventory ManagementObjectivesSupport business strategy and operationsEnsure that inventory practices support financi

6、al objectivesBalance customer service, operations efficiency, and inventory investment cost objectives2556 7Item Inventory ManagementImportance of inventory itemsHow to control inventory itemsHow much to order at one timeWhen to place an orderManagement must establish decision rules about individual

7、 inventory items:6 88Aggregate Inventory ManagementSession 6Aggregate Inventory Management6 9Inventory and the Flow of MaterialsSupplierSupplierSupplierRaw MaterialComponentsMROWork in ProcessFinished GoodsWarehouseCustomerWarehouseCustomerCustomerWarehouseSource: Arnold et al., Introduction to Mate

8、rials Management, 6th ed.Reprinted by Permission of Pearson Education2566 10Reasons for Carrying InventoryThe only good reason for carrying inventory beyond current needs is if it costs less to carry it than not.Inventory allows the company to operate with different production rates and batch sizes

9、throughout the supply, production, and distribution system.Inventory decouples . . .DemandfromSupplyCustomer demand fromFinished goodsFinished goodsfromComponent availabilityOutput of one operationfromOutput of preceding operationMaterials to begin production fromSuppliers of materials6 11Functions

10、of InventoryAnticipation inventory- built up in advance of future demandSafety stock also called fluctuation inventoryLot-size inventoryTransportation inventoryHedge inventory guard against future price increase in purchased items2576 12Inventory ObjectivesBest customer service 98% goal at LillyLow-

11、cost plant operation campaigns in LillyMinimum inventory investment keep as low as possible while maintaining 1st two2596 13Inventory and Other ObjectivesBalance cost of carrying inventory with costs of not carrying inventory Customer service Changing production levels Placing ordersSum of the cost

12、of carrying inventory and the cost of not carrying inventory should be as low as possible6 14Inventory CostSession 6Aggregate Inventory Management6 15Inventory CostsSource: Arnold et al., Introduction to Materials Management, 6th ed.Reprinted by Permission of Pearson Education2616 16Item Costs6 17Ob

13、solescenceDamagePilferageInsuranceDeteriorationCarrying Costs儲囤成本Opportunity CostSpacePersonnelEquipment2626 18Problem 6.1Given the following percentage costs of carrying inventory, calculate the annual cost if the average inventory is $1,000,000.Capital costs= 6%Storage costs= 9% Risk costs= 10%6 1

14、9Problem 6.1 SolutionTotal cost of carrying inventory = 6% + 9% + 10% = 25%Annual carrying cost = .25 $1,000,000 = $250,0006 20Ordering CostsPurchaseFactorySource: Arnold et al., Introduction to Materials Management, 6th ed.Reprinted by Permission of Pearson EducationPurchasing CostProduction Contro

15、l CostSet up and Tear-down CostLost Capacity CostWhats this cost in Lilly?263At the bottleneck6 21Problem 6.2Given the following data, calculate the average cost of placing one order. Annual production control cost= $200,000 Average cost of setup and teardown= $200 Number of orders per year= 20,0006

16、 22Problem 6.2 SolutionAverage cost of placing one order= + $200 = $210$200,000$20,000FixedVariable6 23Stockout CostsCAUSES OF STOCKOUTSSTOCKOUT COSTSDemand during lead time exceeds forecast and available inventoryProduction and supplier problems cause inventory shortagesBackorder costsLost salesLos

17、t customersExpeditingAdditional manufacturing and purchasing2646 24Capacity-Related CostsHow can these be avoided?Level loading, building inv6 25Problem 6.3Total cost of carrying _Slide 6-11_ inventory = Quarter 1Quarter 2Quarter 3Quarter 4Sales2,0003,0004,0003,000ProductionEnding InventoryAverage I

18、nventoryInventory CostBeginning inv = 0Calculate Q level production planDetermine ending invCalculate Av invInv cost = av inv x $3/unit6 26Problem 6.3 SolutionTotal cost of carrying anticipation inventory = $6,000 Quarter 1Quarter 2Quarter 3Quarter 4Sales2,0003,0004,0003,000ProductionEnding Inventor

19、yAverage InventoryInventory Cost3,0003,0003,0003,0001,0001,000005001,000500$1,500$3,000$1,500$00Beginning inv = 0Calculate Q level production planDetermine ending invCalculate Av invInv cost = av inv x $3/unit6 27Financial Statements and InventorySession 6Aggregate Inventory Management6 28Accounting

20、 SystemsAccounting systems classify activities of a company into five types of accounts.Balance sheet accountsIncome statement accounts265Machines, . +Account payable=Own capital6 29Balance Sheet EquationOwners Equity = Assets LiabilitiesAssetsItems you ownLiabilitiesAmounts you owe Owners equityWha

21、t is left over after liabilities are paidAssets = Liabilities + Owners EquityNeed to pay6 30Problem 6.4a. If the owners equity is $1,000 and liabilities are $800, what are the assets worth?Assets = Liabilities + Owners equityb. If the assets are $1,000 and liabilities are $600, what is the owners eq

22、uity?Owners equity= Assets liabilities6 31Problem 6.4 SolutionIf the owners equity is $1,000 and liabilities are $800, the assets are worth= $1,000 + $800 = $1,800If the assets are $1,000 and liabilities are $600, the owners equity is= $1,000 $600 = $4006 32Income StatementIncome = Revenue - Expense

23、sRevenueIncome from sales ofgoods and servicesIncreases ownersequityExpensesCosts incurred inearning revenueDecreases ownersequity2666 33Income StatementRevenue $1,000,000Cost of goods soldDirect labor$200,000Direct material$400,000Overhead$200,000Total cost of goods sold - $ 800,000Gross margin (gr

24、oss profit) $ 200,000General and administrative expense- $ 100,000Net income (profit) $ 100,000Taxes6 34Inventory and Financial ResultsSo inventory on the books is not as good as inventory converted into products and then sold.Because raw material inventory is an expense on the income statement; it

25、offsets revenue, which reduces assets.And WIP and finished goods inventory include allocations of direct labor and factory overhead i.e., costs added in production which also offset revenue and reduce assets.Inventory is an asset on the balance sheet, so why not have more of it?The sale of a manufac

26、tured product converts inventory and its built up costs into revenue, which includes a profit margin i.e. the value added by the production process. Revenues are thus higher than costs, to the benefit of cash and owners equity on the balance sheet.From a supply chain management perspective as well,

27、converting inventory quickly into sales is a major objective and has positive financial statement implications.How aggregate inventory management is concerned with the flow of materials through various inventory classifications to produce a profitReducing mfging LT, increasing cashflow, receiving sa

28、les cash before creating inv6 35Problem 6.5Revenue$ Cost of goods soldDirect labor$Direct material$Overhead$ Total cost of goods sold$Gross margin (gross profit)$General and administrative expenses$Net income (profit)$Do problem in your book now6 36Revenue$ Cost of goods soldDirect labor$Direct mate

29、rial$Overhead$ Total cost of goods sold$Gross margin (gross profit)$General and administrative expenses$Net income (profit)$Problem 6.5 Solution$1,500,000300,000500,000400,0001,200,000300,000150,000150,000What would happen to profit if through better materials mgmt, material costs were reduced by $5

30、0,000?6 37Cash Flow AnalysisThe inflow and outflow of cash in the business over a given period of timeTo survive, a business must have the cash available to pay its bills2676 38Cash FlowInventory StatusEffect on Cash FlowRaw materialCash outflowWork in processCash outflowFinished goodsCash outflowAc

31、counts receivable paidCash inflow6 39Inventory TurnsA measure of how effectively inventory is being usedExample:Annual cost of goods sold = $1,000,000Average inventory = $500,000Annual cost of goods soldAverage inventory in dollarsInventory turns =$1,000,000$500,000Inventory turns = = 2268Inventory

32、turnover6 40Days of SupplyUsed to measure the relationship between usage (sales) and inventoryIn this example, 6,000 units are sold on average over a period of 30 days at 200 units per dayInventory turns every 30 days, or 12 times a year (inventory turns are 12)Days of supply = 2006,000= 30 daysInve

33、ntory on handAverage daily usage =269unitsUnits/day6 41Problem 6.6 =d. Annual Savings=a. Inventory turns=b. Average Inventory=Annual Cost of Goods SoldInventory Turnsc. Reduction in inventory= COGS $10 million, Av inv $2.5 millionCOGS/AV Inv = 4If inv turns = 10If carrying cost = 20%Old - new av inv

34、6 42Problem 6.6 Solution$10,000,000$2,500,000= 4=$10,000,000= $1,000,00010 d. Annual Savings=a. Inventory turns=b. Average Inventory=Annual Cost of Goods SoldInventory Turnsc. Reduction in inventory= $2,500,000 $1,000,000 = $1,500,00020% x $1,500,000 = $300,000COGS $10 million, Av inv $2.5 millionCO

35、GS/AV Inv = 4If inv turns = 10If carrying cost = 20%Old - new av inv6 43Wrap-Up and HomeworkSession 6Aggregate Inventory Management6 44Learning ObjectivesRecognize at least five different classes of inventory Explain six functions of inventoryIdentify three objectives of aggregate inventory manageme

36、ntDetermine the five types of inventory costsExplain the relationship between assets, liabilities, and owners equity on the balance sheetExplain financial statements and their relationship to aggregate inventoryCalculate inventory turns and days of supply measurementsUpon completion of this session,

37、 participants will be able to:6 45Vocabulary CheckObjective: Reinforce terminology used in this session.Complete the activity in class, individually or in pairs, or as homework6 46Vocabulary Check Solution1. d2. f3. a4. j5. h6. i7. c8. l9. e10. k11. b12. g6 47Problem 6.7Given the following information, calculate the annual cost of carrying inventory.Orders placed per year=1,000Receiving costs per order=$15Annual office expense=$8,000Average inventory=$500,000Cost of capital=10% of average inventory value Cost of storage= 8% of average inventory valu