Inventory Management and Replenishment of Components Assignment

Inventory Management and Replenishment of Components - Assignment Example The critical replenishment parameters for item H1: Item H1 reflects a non-existing or poor inventory control strategy. The need to adopt floor-ready merchandise would address the uncertainty of replenishment. Such model allows the implementation of a rapid stock-replenishment strategy. Besides, adoption of continuous replenishment or supplier-assisted inventory replenishment would assist in streamlining H1. Adoption of Periodic review and Continuous review (Silver, 1998; Moustakis, 2000). Refers to the frequencies of evaluation that determines when to place an order for the replenishment. To place a replenishment order, a pre-determined level (re-order level or re-order point) is set so guide continuous reviewing process when the stock falls below the inventory level. Continuous review is most appropriate for companies using IT systems in tracking inventories. H1 could also be reviewed periodically. Under this model, inventories are evaluated at a particular frequency. During the rev iew, if the stock levels are below the predetermined level a replenishment order would be placed (Silver, 1998; Moustakis, 2000). However, if it is still within the cycle, the reordering would be ignored. Using the fixed stock quantity (230 units) together with a reorder quantity of 300 units are used alongside the continuous review. It assumes an Instantaneous replenishment of order. Involves placing orders when it falls below the 300 units re-order level (which is predetermined). The process triggers order when the stock falls below a predetermined reorder level.