Companies often make large investments in inventory to provide service to
their customers. However, it can be challenging to determine if these
investments are worthwhile. This course focuses on the valuation, analysis,
and measurement of inventory and customer service.
Maintaining the proper inventory necessary to meet supply chain objectives is
often a challenging and capital-intensive proposition that carries substantial
costs. In fact, holding inventory is commonly a company’s second largest
logistics expense. However, carrying too little inventory can reduce customer
service to unacceptable levels, which can lead to lost revenue or increased
costs. Therefore, managers must be equipped to evaluate this important trade-
off between customer service and holding inventory.
To properly evaluate this trade-off, managers must first understand how
inventory is valuated and classified. Therefore, it is important to identify
the three most common inventory valuation methods and how inventory may be
classified through valuation- or volume-based methodologies. Further, managers
must be able to evaluate both inventory management and customer service
performance. This in turn makes it critical to identify the common ways in
which companies measure inventory management performance and how fill rate and
inventory availability measures are used to measure customer service
After completing this course, you should be able to:
Valuate and analyze inventory by applying common and specially targeted valuation and analysis methods.
Measure inventory management performance.
Measure the fill rate and inventory availability associated with customer service.