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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

-Demand predictability

-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.


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