This week’s topics
Quantitative Inventory Optimization and Valuation
- Economic Order Quantity (EOQ) mathematical modeling
- Sensitivity analysis under stochastic demand
- Strategic evaluation of LIFO vs FIFO accounting
- Balance sheet impacts of inventory valuation methods
- Mod-04 Lec-09 Inventory Models -- Costs, EOQ model
- Financial Accounting 7A: Inventory- LIFO Reserve, LIFO Liquidation
- EOQ Sensitivity Analysis
What you will be able to do
- 4.1 Design effective and economic order quantity for procurements in an organisation.
- 4.2 Critically evaluate the role of the principles of LIFO and FIFO in inventory control.
Activity
Start with this week’s 3 videos, then: Seminar, guided reading and a short written task: design effective and economic order quantity for procurements in an organisation.
Study materials
Videos
- Financial Accounting 7A: Inventory- LIFO Reserve, LIFO Liquidation · YouTube · Accounting Accidentally · 8 min · for registered students
- EOQ Sensitivity Analysis · YouTube · MIT Center for Transportation & Logistics · 3 min · for registered students
- EOQ Allowing Backorders · YouTube · MIT Center for Transportation & Logistics · 5 min · for registered students
- EOQ with All Unit Discount · YouTube · MIT Center for Transportation & Logistics · 2 min · for registered students
Further resources
- MIT OCW ESD.260J Logistics Systems (Fall 2006), Inventory management I: EOQ · PDF · MIT OpenCourseWare, slides · for registered students
- Principles of Accounting, Volume 1: Financial Accounting, ch. 10: Inventory · PDF · OpenStax, textbook chapter; pp. 603–650 · for registered students
- MIT OCW ESD.260J Logistics Systems (Fall 2006), Inventory management IV: probabilistic demand, safety stock · PDF · MIT OpenCourseWare, slides · for registered students
Materials marked “for registered students” open in the student portal, which is set up as soon as you receive final acceptance.
