Multiple order inventory control model
Multiple order inventory control models are used when raw materials,
wip, or finish goods are required more than one time or on an ongoing basis. They are the most common type of production/inventory management models as they are common within external and internal
supply chain steps and in delivering goods to customers where multiple orders for materials or products are placed by customers.
When only one order is placed or it's a one of
inventory decision this is referred to a
single order inventory model. Most inventory software packages are designed for multiple order inventory applications, some have better inventory features than others.
Multiple order inventory models are classified by what triggers a supply/production/purchase order within the
supply. Supply, production, or purchase orders can be triggered by stock levels, usually a buffer or safety stock level, for fixed order quantities or a defined time span.
Examples of this type of
inventory control models are the following:
Fixed order and Stock level inventory control
Economic order quantity (EOQ)
two bin system
ABC Warehousing inventory model
First in first out (FIFO)
Time interval inventory control
Time interval inventory models
One bin system
When choosing any of these inventory models it is important to take into account:
- Total inventory costs including holding costs
-Product and inventory shelf life
-Value to weight ratio
Multiple order inventory models can also be classified as build to order or build to stock systems. The use of these inventory models can be found in their respective pages.
More lean concepts and terms