Introduction to Inventory Control Model

Inventory Control Models

Inventory is an expensive and important asset to many companies or organization or institution.

Some Feature of Inventory Control Models

01. Lower inventory levels can reduce costs.

02. Low inventory levels may result in stockouts and dissatisfied customers

03. Most companies try to balance high and low inventory levels with cost minimization as a goal

04. Inventory is any stored resource used to satisfy a current or future need
Common examples are raw materials, work-in-process, and finished goods

05. Inventory may account for 50% of the total invested capital of an organization and 70% of the cost of goods sold

06. All organizations have some type of inventory control system

07. Inventory planning helps determine what goods and/or services need to be produced

08. Inventory planning helps determine whether the organization produces the goods or services or whether they are purchased from another organization

09. Inventory planning also involves demand forecasting

Inventory planning and control

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