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Lead time is the time between placing an order and receiving it. Accurate lead time estimation is crucial for determining reorder points and managing safety stock levels.

Safety stock is additional inventory beyond expected demand to protect against variability in demand or supply lead times. It provides a buffer against stockouts.

This system updates inventory levels at regular intervals and determines if an order should be placed. It contrasts with the perpetual system which updates inventory after each transaction.

It specifies the level of inventory at which an order should be placed to replenish inventory. It's calculated based on lead time demand and safety stock to prevent stockouts.

A ratio that measures how often inventory is sold and replaced over a period. It is calculated by dividing the cost of goods sold by the average inventory. A higher ratio indicates more efficient inventory management.

The Economic Order Quantity model finds the quantity to order that minimizes total inventory costs which include holding costs and ordering costs. It assumes a constant demand rate, no lead time, and instantaneous replenishment.

A JIT inventory system aims to align order times with production schedules to minimize inventory holding costs. It requires accurate demand forecasting and a responsive supply chain.