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Essay / Research Paper Abstract
This 4-page paper provides an article analysis about Stig-Arne Mattsson's "Inventory control in environments with short lead times." Bibliography lists 1 source.
Page Count:
4 pages (~225 words per page)
File: AS43_MTartiinve.doc
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Unformatted sample text from the term paper:
management/materials handling actually hearken back to the dawn of the industrial revolution; the period beginning in the late 19th century. The question that needs to be asked, however, is whether
these methods from more than a century ago are applicable to todays supply chains. According to Stig-Arne Mattsson, the answer is yes, but
to a point. In his article "Inventory control in environments with short lead times," the author attempts to point out that inventory management and materials managing methods introduced around a
century ago are still applicable today - at least from a theoretical point of view. In reality, however, not so much. Mattsson launches
his argument by providing a brief review of methods introduced in print during the early 20th century, such as calculating economic order quantities, the reorder point system and cover-time planning,
a method developed during the 1950s. These methods should still work great, Mattsson argues, but the problem is that the economy and
materials handling mentality have shifted from far-ahead lead times (with inventories typically replenished in one month or less) to just-in-time philosophies, which require extremely short lead times. The trend these
days is for smaller order quantities and shorter lead times, versus the larger order quantity and lead times that, at the quickest, are a couple of weeks. This can wreak
havoc on a reorder point type of model - as Mattsson points out, a reorder point is the "sum of two components, the expected demand during the replenishment lead time
and the safety stock" (p. 118). The problem, Mattsson notes, is that shortage costs are difficult, if not impossible, to estimate through a time-independent parameter - rather, theyre dependent on
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