Logistics Management Midterm

literally defined as a stock of goods which a business manages to produce products or perform services.

This is represented by an item whose demand is linked directly to the demand or production level of another item.

This refers to the inventory requirement for finished goods or a product available for customers’ consumption or use

These are made up of the resources a business uses to produce its own goods. This category also includes goods used in the manufacturing process, such as components used to assemble a finished product.

These are materials and parts that have been partially transformed from raw materials but are not yet finished goods and can include partially assembled items that are waiting to be completed.

These are products that are ready to be shipped directly to customers, including wholesalers and retailers.

These are items a business needs to operate, such as office equipment, packing boxes, and tools and parts to repair equipment.

These are also known as holding costs

These are costs involved in the acquisition and storage of inventory items

The value of this cost depends on current interest rates which can range from 5% to 25%. Money used to purchase inventory items can be derived from borrowed capital and internal sources. Capital cost is derived from the interest rates of borrowed finances while opportunity cost is derived from the return that a money would generate if it is invested in other things