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English for Logistics Science Part3 Warehouse Management Text Two Warehousing Alternatives Warehouse Alternatives Part4 Inventory Management Text One What is Inventory Management？ Reading Materials Inventory Management Exercise Dialogue How Much Should I Order （Xiao Zhang is now in a consulting office where Peter, an expert in logistics, is helping him to solve a problem as to how to order. Inventory Decision（库存决策） Inventory decision involves knowing how much to order and when to order. How much to order In deciding how much to order, the company needs to balance order-processing costs against inventory-carrying costs. The order-processing costs include supplier selection, receiving, inspection, order paperwork preparation and so on. The inventory carrying costs consist of ： storage cost physical management costs, including handling, housekeeping, and accounting etc Insurance and taxes the risk of obsolescence due to engineering or style change the cost of money invested including interest When to order When the stock will be near safety stock level of used up, the material has to be reordered. The span of time, including order preparation time, queue time, processing time, moving time, and receiving and inspection time, is called lead time. If the rate of sale for a product is 50 units per day, and the lead time is 5 days, to ensure that goods arrive just as the last unit is sold, order should be placed 5 days ahead of the stock-out day. Pair work：talking face to face, and think it over, discuss the following questions. 1. How do you understand the inventory? 2. Is inventory necessary to every company? 3. What is the primary goal in inventory? 4. Why is inventory used as a buffer? 5. Why is inventory so important to a firm? 6. How many functions of inventory are there? 7. As an inventory manager, how do you achieve inventory goal? 8. As an