LOG722 Inventory Management (Autumn 2022)

About the course

The course will discuss inventory management principles and models both for fixed rate (deterministic) and uncertain (stochastic) demand. The models aim to develop ordering policies which balance the different types of costs such as ordering, holding and stock-out costs in various situations. Stochastic problems include the one-periodic News vendor problem and multi-period (Q,R)-models where order size and reorder point should be determined simultaneously. Emphasis will be placed on differentiation of products according to an ABC-analysis where different policies can be developed for different product types. Special models are presented for treating slow-moving and expensive articles.

The course is connected to the following study programs

• Master of Science in Logistics
• Experience-based Master in Logistics
• Exchange programme - Master's level

Recommended requirements

The same as for the MSc program in logistics

The student's learning outcomes after completing the course

Knowledge

The student should have knowledge of:

• Different types of inventory management problems and corresponding decisions about order sizes, order frequencies, safety stock and service level
• Costs related to ordering, holding inventory and stock-outs
• Inventory management systems
• Deterministic versus stochastic demand, one period versus multiple period inventory management
• ABC analysis and how this affects inventory management

Skills

The student is able to:

• Calculate optimal order sizes based on the basic EOQ model and the most common extensions of this model
• Calculate order size and expected profit for one-period inventory problems (The Newsboy Problem)
• Calculate safety stock and safety factor for inventory management problems with stochastic demand, with different types of service level and stockout costs

General competence

The student can:

• Comprehend and apply models, formulas and solution methods for inventory management problems described textbooks and research articles

Forms of teaching and learning

3 hours of lectures per week.

Coursework requirements - conditions for taking the exam

• Mandatory coursework: Assignment(s)
• Courseworks given: 2
• Courseworks required: 2
• Presence: Not required
• Comment:

Examination

• Form of assessment: School assessment

• Proportion: 100%

• Duration: 5 hours

• Grouping: Individual

• Grading scale: Letter (A - F)

• Supported material: Calculator that may contain data + general dictionary in mother tongue/Norwegian/English in paper version

Syllabus

Pensumoversikt

• LOG722 Inventory Management