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    Work in progress Inventories Finished goods inventories Indirect inventories 1. Direct Inventories:- Items which form an integral part of the finished goods. Indirect Inventories:- Stored items, which do not form an integral part of the finished product but are necessary for upkeep of the plant facilities like lubricants, coolants, office material, etc. Holding or carrying costs. Costs for capital, taxes, insurance, etc. Dealing with storage and handling Setup or production change costs. Shortage backordering costs. Costs of canceling an order, customer goodwill, etc. Classification: Single Product item Inventory models. Multi Product inventory models Single Product inventory models: Deterministic inventory models with no shortages: Inventory model with uniform demand Inventory model with several production runs of unequal length Inventory models with finite replenishment Production Inventory model with shortages: Inventory model with instantaneous production and variable order cycle. Inventory model with instantaneous production and fixed order cycle. Inventory models with finite replenishment Production Inventory models when quantity discount is allowed: With one price break More than one price break Probabilistic models:- Take into account the variation in demand and lead time. Wilson in Mode for uniform demand rate and infinite production rate. Salient Features: Inventory is know with certainty.

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    Inventory model with instantaneous production and fixed order cycle. Inventory models with finite replenishment Production Inventory models when quantity discount is allowed: With one price break More than one price break Probabilistic models:- Take into account the variation in demand and lead time.

    Wilson in Mode for uniform demand rate and infinite production rate. Salient Features: Inventory is know with certainty. Demand rate is constant Single lot placement of order Quantity discount is not allowed.

    Thus, purchase cost per unit is fixed. Lead time is constant and it is independent of demand. Inventory is controlled form one point of the system i.

    Assumes lead time is Zero. You receive an order quantity Q. The cycle then repeats.

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    Number of units on hand R 2. Your start using them up over time. L Time L 3. When you reach down to a level of inventory of R, you place your next Q sized order. EOQ inventory order point that minimizes total costs. Supplier continuously replenishes items at rate, which is more than the consumption rate. Because the time inventory is supplied the consumption also continues.

    The supply is gradual.

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