In addition to supply chain nodes and links, performance cycles involve inventory
assets. Inventory is measured in terms of the asset investment level allocated to support
operations at a node or while a product or material is in transit. Inventory committed to
supply chain nodes consists of base stock and safety stock. Base stock is inventory held at
a node and is typically one-half of the average shipment size received. Safety stock exists
to protect against variance in demand or operational lead time. It is at and between supply
chain nodes that work related to logistics is performed. Inventory is stocked and flows
through nodes, necessitating a variety of different types of materials handling and, when
necessary, storage. While a degree of handling and in-transit storage takes place within
transportation, such activity is minor in comparison to that typically performed within a
supply chain node, such as a warehouse.
In addition to supply chain nodes and links, performance cycles involve inventoryassets. Inventory is measured in terms of the asset investment level allocated to supportoperations at a node or while a product or material is in transit. Inventory committed tosupply chain nodes consists of base stock and safety stock. Base stock is inventory held ata node and is typically one-half of the average shipment size received. Safety stock existsto protect against variance in demand or operational lead time. It is at and between supplychain nodes that work related to logistics is performed. Inventory is stocked and flowsthrough nodes, necessitating a variety of different types of materials handling and, whennecessary, storage. While a degree of handling and in-transit storage takes place withintransportation, such activity is minor in comparison to that typically performed within asupply chain node, such as a warehouse.
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