Inventory Management MT435

Unit 10: Inventory Management.

Research the following topics related to Inventory Management:

  1. Demand
  2. Inventory control systems
  3. EOQ
  4. Role of inventory management
  5. Reorder point

Select three of the topics listed and compose three paragraphs describing the topics, one paragraph per selected topic, based on the course material and additional research you conduct online.

Operation Management Journal

Inventory Control Systems

Inventory control systems refer to computerized stock control systems used by businesses to manage inventory. Inventory control systems enable businesses to accomplish a number of objectives in relation to stock control (DuBrin, 2011). These objectives include tracking, shipping, purchasing, reordering, storage, warehousing, and among other objectives. Computers that utilize specialized software and hardware components monitor modern inventory control systems. In various businesses, the activities involved in accomplishing the various objectives are often contained within different subsystems. However, the various functions necessary to accomplish the objectives occur in sequence in order to achieve a robust stock control system.


Economic order quantity (EOQ) refers to the quantity of materials or purchases of inventory that a business should make with each order in order to keep the total costs of the inventory minimal (DuBrin, 2011). In adding inventory, the business must ensure that various costs associated with inventory remain minimal. Such costs include order costs, shortage costs, and the stock holding costs. The EOQ model estimates optimal inventory levels in businesses that experience constant demand for their products throughout the year. Businesses use EOQ to monitor inventory levels and make purchases whenever inventory level falls to a specific level, also known as the reorder point.

Role of inventory management

Inventory management is of great significance to the business. Inventory management helps businesses to make items required available at all times. As such, customers are able to acquire a variety of items in a timely manner. Inventory management enables companies to maintain buffer stocks to cushion for various uncertainties in future. Often, replenishment of goods may take more time due to various uncertainties such as supplier lead times, quality issues, and transportation challenges (Wild, 2007). Inventory management helps keep the stock holding costs minimum and thus a reduction in the overall operating costs of the business.



DuBrin, A. J. (2011). Essentials if management. Boston, MA: Cengage Learning.

Wild, T. (2007). Best practice in inventory management. United Kingdom, UK: Routledge.


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