Purchasing and Financing 2024
Purchasing- and Financial Management For 2nd year CATS learners. Aligned to the outcomes of the German accredited certification: “Industrie Kaufmann/frau”.
Purchasing- and Financial Management
For 2nd year CATS learners.
Aligned to the outcomes of the German accredited certification: “Industrie Kaufmann/frau”.
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Quantity<br />
B) Cyclical Ordering System<br />
In cyclical systems, orders are placed at regular intervals, but since consumption is not<br />
constant the order sizes will vary greatly.<br />
If consumption slows down the order quantities will be small, but if consumption pick up<br />
the order quantities will be large. If consumption increases unexpectedly there is a real<br />
danger of running out of stock.<br />
The biggest advantage of this system is that the maximum inventory level will never be<br />
exceeded as it is normally the difference between the maximum stock <strong>and</strong> the current<br />
stock levels that will be ordered. It is however a more labour-intensive system as the stock<br />
level has to be checked <strong>and</strong> the order amount calculated before an order can be placed.<br />
Max Stock<br />
Q2<br />
Q3<br />
Q1<br />
Safety Stock<br />
T1 T2 T3<br />
Time<br />
Where Q1 ≠ Q2 ≠ Q3, but T1 = T2 = T3 as...<br />
T1 = Normal Consumption<br />
T2 = Decreased Consumption<br />
T3 = Increased Consumption<br />
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