1. Explain me what is lead time?
Lead time is the period of time from which a order for goods is placed until it is received by the store. Lead time is an important consideration for determining when orders should be placed.
2. Tell me do You Know When Should A Physical Inventory Be Taken?
A inventory should be taken at least once a year. If items are perishable, seasonal or highly demanded a inventory should be taken more often.
3. Tell us what is the EOQ formula?
The EOQ formula is the square root of 2 times demand times order completion cost divided by carrying cost. The mathematical formula is square root of 2DS/C.
4. Explain me what types of forecasting can I do?
There are two types of forecasting qualitative and quantitative. Qualitative uses personal opinions to determine forecasts. Quantitative uses numerical data and statistical modeling to determine forecasts.
Demand is the quantity that customers are willing to buy. Demand can be found through forecasting and is needed to find the EOQ level.
6. Explain me can Forecasting Help In Controlling Inventory?
Yes, through the use of forecasts inventory levels can be set to meet the demands while keeping levels as low as possible.
7. Tell us do I need to recompute stocking costs for the EOQ level?
Yes, in order to compare stock costs when using the EOQ model you must compute the costs for both the original level and the EOQ level of order quantities.
8. Tell me if I get a discount will it effect the EOQ model?
Yes, a discount will cause the basic EOQ model to fail. To use a discount in determine a EOQ you must use the EOQ model with quantity discounts.
9. Please explain what do the letters in the EOQ and stocking cost formula stand for?
The letters in the formulas represent the quantity ordered(Q), the carrying cost of a unit(C), the demand for the units(D) and the cost of completing a order(S).
10. Tell us what if there is no savings or the models produce even results?
If there is no savings a error in the calculations may have occurred or the model does not fit your case. For instances were the total stocking costs are even you may use either order quantity.