Evaluating Inventory Management and Service Performance

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1.00 hour
Online Self Study


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About the Course

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.

Course Description

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 performance.

Learning Objectives

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.