Inventory Management in Production and Operation

The main purpose of inventory management is to keep the inventories at an optimal level, without stock outs and excesses, and to assure a high level of customer service.

Inventory management acts as a hedge against contingencies by buffering against events such as strikes, fires, and disruptions in supply.

The factors influencing inventory management and control include the nature of the product at various stages, the capacity of the production system, the nature of storage facilities, and the nature of the production system.

<p>The objectives of inventory management include balancing stock availability and the cost of holding inventory, setting stocking levels to avoid stockouts, and finding the most economical replenishment quantities and timing.</p> Signup and view all the answers

<p>Inventory management encourages production, purchase, and transportation economies by taking advantage of price-quantity discounts, transport economies from larger shipment sizes, and acting as a hedge against price changes.</p> Signup and view all the answers