9.1 Getting Started—Advanced Inventory Management

Explain how inventory acts as insurance to protect your firm's operations and sales.

Describe the nature and role of risk in the context of inventory management.

Use ABC classification to segment and manage your firm's SKUs.

Calculate the optimal order quantity and reorder point using the reorder point models.

Discuss managerial approaches to reducing exposure to risk (risk pooling).

Calculate optimal order quantities for "perishable" items such as fresh foods or fast fashion.