SAQA All qualifications and part qualifications registered on the National Qualifications Framework are public property. Thus the only payment that can be made for them is for service and reproduction. It is illegal to sell this material for profit. If the material is reproduced or quoted, the South African Qualifications Authority (SAQA) should be acknowledged as the source.
SOUTH AFRICAN QUALIFICATIONS AUTHORITY 
REGISTERED UNIT STANDARD: 

Develop and implement optimal inventory strategies 
SAQA US ID UNIT STANDARD TITLE
336742  Develop and implement optimal inventory strategies 
ORIGINATOR
SGB Procurement, Logistics and Supply Chain Mngt 
PRIMARY OR DELEGATED QUALITY ASSURANCE FUNCTIONARY
-  
FIELD SUBFIELD
Field 03 - Business, Commerce and Management Studies Procurement 
ABET BAND UNIT STANDARD TYPE PRE-2009 NQF LEVEL NQF LEVEL CREDITS
Undefined  Regular  Level 6  Level TBA: Pre-2009 was L6 
REGISTRATION STATUS REGISTRATION START DATE REGISTRATION END DATE SAQA DECISION NUMBER
Reregistered  2018-07-01  2023-06-30  SAQA 06120/18 
LAST DATE FOR ENROLMENT LAST DATE FOR ACHIEVEMENT
2024-06-30   2027-06-30  

In all of the tables in this document, both the pre-2009 NQF Level and the NQF Level is shown. In the text (purpose statements, qualification rules, etc), any references to NQF Levels are to the pre-2009 levels unless specifically stated otherwise.  

This unit standard does not replace any other unit standard and is not replaced by any other unit standard. 

PURPOSE OF THE UNIT STANDARD 
This Unit Standard will enable learners to develop and implement optimal inventory strategies.

People credited with this unit standard will demonstrate a clear understanding of inventory management and will be able to use this understanding to select appropriate inventory strategies to suit specific situations and motivate why these are appropriate strategies.

A learner credited with this unit standard will be able to:
  • Evaluate the concept of inventory.
  • Plan and develop an inventory system.
  • Apply inventory planning systems and models to cater for dependent demand. 

  • LEARNING ASSUMED TO BE IN PLACE AND RECOGNITION OF PRIOR LEARNING 
  • Communication at NQF Level 4.
  • The execution of supervisory tasks.
  • Mathematical Literacy at NQF Level 4. 

  • UNIT STANDARD RANGE 
    The applied competence expressed in this standard covers the knowledge and understanding of:
  • The importance of inventory management.
  • The benefits of effective inventory management.
  • The impact of inventory management on the total organisation.
  • Various inventory management models and tools.
  • The integrated applications of these models and tools.

    The range includes innovative responses to concrete but sometimes unfamiliar problems, using basic analytical interpretation of information. 

  • Specific Outcomes and Assessment Criteria: 

    SPECIFIC OUTCOME 1 
    Evaluate the concept of inventory. 

    ASSESSMENT CRITERIA
     

    ASSESSMENT CRITERION 1 
    The concept of inventory is analysed to determine why they are required and ways in which they are maintained for optimal inventory strategies. 

    ASSESSMENT CRITERION 2 
    The nature and importance of inventories are evaluated to determine optimal utilisation and availability of stock. 

    ASSESSMENT CRITERION 3 
    The difference between independent and dependent demand are illustrated to ascertain how inventories are managed. 

    ASSESSMENT CRITERION 4 
    The concept of balancing supply with demand is examined to ensure sustainable supply chains. 

    SPECIFIC OUTCOME 2 
    Plan and develop an inventory system. 

    ASSESSMENT CRITERIA
     

    ASSESSMENT CRITERION 1 
    Inventory planning models are identified in order to determine the conditions under which each should be used. 

    ASSESSMENT CRITERION 2 
    Inventory planning is conducted using appropriate inventory models given different scenarios. 

    ASSESSMENT CRITERION 3 
    Statistical models are used to calculate inventory levels and solve inventory problems. 

    ASSESSMENT CRITERION 4 
    Practical problems in using the statistical models are identified and analysed to ensure optimal functioning of the inventory system. 

    ASSESSMENT CRITERION 5 
    The requirements for effective inventory management are verified to ensure optimal customer satisfaction of inventory availability. 

    ASSESSMENT CRITERION 6 
    A decision is made on a specific inventory system on the basis of the advantages and disadvantages of the inventory system. 

    SPECIFIC OUTCOME 3 
    Apply inventory planning systems and models to cater for dependent demand. 

    ASSESSMENT CRITERIA
     

    ASSESSMENT CRITERION 1 
    The concept of dependent demand is analysed to determine its influence on inventory planning systems and models. 

    ASSESSMENT CRITERION 2 
    Inventory planning systems and models are applied in accordance with the changing role of materials requirements planning (MRP) within manufacturing organisations. 

    ASSESSMENT CRITERION 3 
    Inventory planning systems and models are implemented in accordance with the concepts and calculations that drive an MRP system. 

    ASSESSMENT CRITERION 4 
    The elements that make up an MRP system are illustrated through their application in service operations. 

    ASSESSMENT CRITERION 5 
    MRP and just in time is used effectively in organisations by verifying the linkages with CRP. 


    UNIT STANDARD ACCREDITATION AND MODERATION OPTIONS 
  • Any institution offering learning that will enable achievement of this unit standard must be accredited by the relevant ETQA.
  • Moderation of assessment will be overseen by the relevant ETQA at its discretion.
  • Moderation should encompass achievement of competence described in both individual unit standards as well as the integrated competence described in the Qualification. 

  • UNIT STANDARD ESSENTIAL EMBEDDED KNOWLEDGE 
  • What is meant by the various types of inventory (Raw materials, finished goods, work in progress.
  • What it requires to protect against uncertainty.
  • How inventories are used to support the strategic plans.
  • How inventories are used to take advantage of economies of scale.
  • The functions of inventory.
  • The objectives of inventory control.
  • What is meant by the holding and carrying cost of inventories.
  • What is meant by the "Set-up or ordering cost".
  • What is meant by stock out or shortage cost.
  • The reasons for holding inventories.
  • The reasons for not wanting to hold inventories (carrying cost, cost of customer responsiveness, cost of coordinating production, cost of diluted return on investment, reduced capacity cost, cost of production problems).
  • The basic nature of inventories.
  • The fundamental issues that underlie inventory planning (How much to order of each material and when to place orders).
  • The sources of demand.
  • The sources of supply.
  • Individual item management (order policies: Lot for lot, period order, fixed order quantities, economic order quantities, cycle replenishment, safety stock levels).
  • What a good inventory counting system looks like (perpetual inventory system, two bin system, universal product coding etc).
  • The impact of procurement on inventory management.
  • The various inventory stock types and the appropriate ways of controlling the inventory (vendor held stock, consignment stock).
  • The need for proper demand forecasting and lead time information (Lead time systems, point of sale systems).
  • The impact of inventory cost on inventory management.
  • The use of effective classification systems (A-B-C approach, cycle counting, etc).
  • The fixed order quality and fixed time period system.
  • The basic economic order quantity model (Fixed order quantity model) (EOQ).
  • The fixed order quantity model with usage.
  • Fixed time period model.
  • Quantity discount model.
  • Economic production quantity model (EPQ).
  • The impact of inventory on service levels.
  • How much to order using the fixed order interval model.
  • How to use the single period model (continuous stocking levels, discrete stocking levels).
  • How the economic order quantity models work in relation to the real world.
  • Planning inventory when working with perishable inventory.
  • The single period inventory model.
  • The working of inventory management in a services environment (Yield management and revenue management).
  • How to determine realistic costs.
  • ABC inventory planning.
  • How to ensure inventory accuracy.
  • The latest trends in inventory management.
  • What materials requirements planning (MRP) and master production scheduling (MPS) is and what the relationship between them are.
  • The purpose, objective and philosophy of MRP.
  • The benefits of MRP.
  • Where MRP can be used.
  • The structure of an MRP system (Demand for products: Available to promise and the demand for spare parts and supplies - bill of materials file, inventory record file, inventory transaction file, the MRP computer programme, output reports).
  • The fundamentals of capacity requirements planning (CRP).
  • The fundamentals of manufacturing resources planning (MRP II).
  • The use of MRP in services.
  • Lot sizing in MRP systems.
  • What CRP is and how it works.
  • The link between MRP and CRP. 

  • UNIT STANDARD DEVELOPMENTAL OUTCOME 
    N/A 

    UNIT STANDARD LINKAGES 
    N/A 


    Critical Cross-field Outcomes (CCFO): 

    UNIT STANDARD CCFO IDENTIFYING 
    Identifying and solving problems in which responses display that responsible decisions using critical and creative thinking have been made when:
  • Recognise and solve inventory related problems using appropriate techniques to determine the appropriate inventory levels for a range of situations and recommending improvements and creative solutions to optimise inventory levels. 

  • UNIT STANDARD CCFO WORKING 
    Working effectively with others as a member of a team, group, organisation, and community during:
  • Setting up of the inventory system. 

  • UNIT STANDARD CCFO ORGANISING 
    Organising and managing oneself and one's activities responsibly and effectively through:
  • Implementing relevant inventory management systems aligned to business requirements. 

  • UNIT STANDARD CCFO COLLECTING 
    Collecting, analysing, organising and critically evaluating information when:
  • Collect, analyse, organise and critically evaluate inventory information in order to optimise customer service levels. 

  • UNIT STANDARD CCFO COMMUNICATING 
    Communicating effectively using visual, mathematical and/or language skills in the modes of oral and/or written persuasion when:
  • Deciding on an appropriate inventory system. 

  • UNIT STANDARD CCFO SCIENCE 
    Using science, technology and indigenous knowledge effectively and critically, showing responsibility towards the environment and health of others through:
  • Applying relevant legislation, regulations and environmental policies and procedures. 

  • UNIT STANDARD CCFO DEMONSTRATING 
    Demonstrating an understanding of the world as a set of related systems by recognising that problem-solving contexts do not exist in isolation when:
  • Matching the inventory management system to the business needs and objectives. 

  • UNIT STANDARD ASSESSOR CRITERIA 
    N/A 

    REREGISTRATION HISTORY 
    As per the SAQA Board decision/s at that time, this unit standard was Reregistered in 2012; 2015. 

    UNIT STANDARD NOTES 
    N/A 

    QUALIFICATIONS UTILISING THIS UNIT STANDARD: 
      ID QUALIFICATION TITLE PRE-2009 NQF LEVEL NQF LEVEL STATUS END DATE PRIMARY OR DELEGATED QA FUNCTIONARY
    Elective  74149   National Certificate: Supply Chain Management  Level 5  NQF Level 05  Reregistered  2023-06-30  TETA 


    PROVIDERS CURRENTLY ACCREDITED TO OFFER THIS UNIT STANDARD: 
    This information shows the current accreditations (i.e. those not past their accreditation end dates), and is the most complete record available to SAQA as of today. Some Primary or Delegated Quality Assurance Functionaries have a lag in their recording systems for provider accreditation, in turn leading to a lag in notifying SAQA of all the providers that they have accredited to offer qualifications and unit standards, as well as any extensions to accreditation end dates. The relevant Primary or Delegated Quality Assurance Functionary should be notified if a record appears to be missing from here.
     
    1. Academics Dynamics (Pty) Ltd 
    2. Aldabri 106 Institute for Quality Pty Ltd 
    3. Andebe Training and Skills Development 
    4. BPL Academy 
    5. Centre for Logistics Excellence (Pty) Ltd 
    6. College of Production Technology 
    7. COMMERCE EDGE SOUTH AFRICA PTY LTD 
    8. Global Maritime Legal Solutions Pty Ltd 
    9. KVR TRAINING AND BUSINESS SOLUTIONS PTY LTD 
    10. Makwedeng Training 
    11. Metro Minds 
    12. Phephani Learnerships cc 
    13. Pro-Active Assessment and RPL College (Pty) Ltd 
    14. School of Shipping 
    15. UKWAKHILE TRAINING 
    16. Y2K College 



    All qualifications and part qualifications registered on the National Qualifications Framework are public property. Thus the only payment that can be made for them is for service and reproduction. It is illegal to sell this material for profit. If the material is reproduced or quoted, the South African Qualifications Authority (SAQA) should be acknowledged as the source.