Purchasing, Outsourcing and Inventory Management
“Purchasing refers to a function in business whereby the enterprise obtains the inputs for what it produces, as well as other goods and services it requires. Outsourcing became part of the business lexicon during the 1980s and often refers to the delegation of non-core operations from internal production to an external entity specializing in the management of that operation” (Wikipedia 2007).
In this chapter we discuss the importance of purchasing and outsourcing to the order-fulfillment process, focusing on decision-making and models that can help management decide on when to use purchasing and outsourcing and how to do it. We start by introducing the term capacity and will proceed to discuss models for inventory management and control.
KeywordsLead Time Inventory Level Inventory Management System Dynamics Model Demand Rate
- Burt DN (1989) Managing product quality through strategic purchasing. Sloan Management Review 30: 39–48Google Scholar
- Coyle RG (1978) Management system dynamics. Wiley, ChichesterGoogle Scholar
- Forrester JW (1961) Industrial dynamics. MIT Press, Cambridge, MAGoogle Scholar
- Forrester JW (1980) System dynamics – future opportunities. In Legasto A, Forrester JW, Lyneis JM (eds), System dynamics. TIMS studies in the management sciences, vol. 14. North Holland Publishing, Amsterdam, pp. 7–21Google Scholar
- Newman RG (1988) Single source qualification. Journal of Purchasing and Materials Management 24: 10–17Google Scholar
- Pence LJ, Saacke P (1988) A survey of companies that demand supply quality. ASQC Quality Congress Transactions, Milwaukee, 715–722Google Scholar
- Silver EA, Pyke DF, Peterson R (1998) Inventory management and production planning and scheduling, 3rd ed. Wiley, New York, NYGoogle Scholar
- Stallkamp TT (2005) Score! A better way to do business (moving from conflict to collaboration). Wharton School Publishing/Pearson, Upper Saddle River, NJGoogle Scholar
- Sterman JD (2000) Business dynamics – system thinking and modeling for a complex world. Irwin McGraw Hill, New York, NYGoogle Scholar
- Waters D (2003) Inventory control and management, 2nd ed. Wiley, New York, NYGoogle Scholar