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Are inventory benchmarks really useful?

April 26, 2017benchmarks Inventory useful

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Are inventory benchmarks really useful?

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The article discusses the application of inventory benchmarks by healthcare facilities. Since inventory benchmarks have many limitations, supply chain managers should determine maximum inventory value through a combination of the optimal reorder point (ROP) and the reorder quantity (ROQ). A formula that accounts for variable demand and variable lead time for the ROP is described.