This exercise is designed to introduce students to (Q,R) inventory reorder policies, where Q is the order size and R the reorder point. The exercise is motivated by the issues faced by Caterpillar (CAT) in managing its parts warehouse in Europe. The Caterpillar example is based on information obtained from their website, but the numbers utilized in the exercises and assignment are fabricated to achieve the pedagogical objective.
At the end of this exercise, the student should have an understanding of: The issues faced by organizations such as Caterpillar in trying to manage independent-demand inventory systems Continuous-review inventory policies The Economic Order Quantity (EOQ) model (Q,R) inventory reorder policies
- Inventory reorder policies
- Continuous review inventory policies
- Economic order quantity
- Spare parts management
- Independent demand inventory. AR2002
- RD0102