Dispatching Quality as a management ratio

In the chapter Active Inventory Management , we introduced the possibility of constantly being able to determine the inventory level which from an economical standpoint would be necessary to render the performance demanded from your enterprise. We call this inventory 

It is very interesting to find out whether and by how much our actual inventory levels (IVL) are higher than those which are needed. This produces a very useful ratio that management tracks at least once per month. 

It is derived from the quotient of actual inventory level and the inventory level required for operations  

At first, this ratio is always greater than 2.0. This means that we have more than twice as much inventory in stock than we actually need. 

The SCM has the job of finding the causes of the oversupply together with the departments and eliminating them. 

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