Supply Chain Glossary - R

Supply Chain Glossary - R

replacement cost systems

A method of inventory valuation that assigns an item cost based on the next item price incurred.

The percentage of time on average that an item will require replacement. The replacement factor is also expressed as a percentage applied to the quantity per assembly on the bill of material. It is useful for forecasting materials and capacity requirements for planning purposes. See: occurrence factor, repair factor.


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