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Inventory Tracking. ? ABC Analysis of inventory recognizes that inventories are not of equal value and that all inventory should not be managed in the same way. ? Measures used to determine ABC status include sales volume, the fastestselling items, item profitability, or item importance. ? In terms of item importance, ABC might be operationalized as follows: A ―― the highest criticality。 Safety or buffer stock。 Pipeline or intransit stock。 B ―― moderate criticality。 VendorManaged Inventory (VMI)。 Cycle or base stock。 Speculative stock. ?While inventory generally exists to service demand, in some situations inventory is carried to stimulate demand, also known as psychic stock. ― ― Retail stores stock huge amounts of certain merchandise. ?Cycle, or base, stock refers to inventory that is needed to satisfy normal demand during the course of an order cycle. ― ― We use one egg per day and we buy eggs every 12 days. ?Safety, or buffer, stock refers to inventory that is held in addition to cycle stock to guard against uncertain in demand and/or lead time. ― ― making a threeegg omelet。 C ―― low criticality. ? Justin Time (JIT) Approach: From an inventory perspective, the JIT approach seeks to minimize inventory by reducing safety stock, as well as by having the required amount of materials arrive at the production location at the exact time that they are needed. ? The JIT approach has a number of important implications for supplychain efficiency. ? Collaboration among supplychain participants is key to successful JIT initiatives. ? VendorManaged Inventory (VMI): Under VMI, the size and timing of replenishment orders are the responsibility of the manufacturer. ? VIM’s benefits for distributors and retailers tend to involve a reduced number of stockouts and higher inventory turns, while manufacturer benefits include improved demand forecasting. ? One potential drawback to VIM is inadequate data sharing between the relevant parties, in part because of trust and control concerns. ?Inventory Tracking: Advance in technology are making it easier (and less costly) to keep track of inventory, which can translate into marked improvements in supp