Inventory Theory

1. Definition of the Inventory Theory Inventory theory (or more officially the mathematical theory of enumeration and intersectionion) is the sub-specialty within operations look into that is concerned with the design of production/inventory systems to minimize costs. It studies the decisions confront by firms and the military in connection with manufacturing, wargonhousing, supply chains, apparent part allocation and so on; it permits the mathematical stern for logistics. Inventories are temporals stored, waiting for processing, or experiencing processing. They are ubiquitous in modern business. Observation of almost any company match sheet reveals that a very significant part of its assets incorporate inventories of raw materials, products within the production process, or finished products. most managers dont like inventories, because they are like money set in a drawer, assets tied up in investments that are not earning money. They also incur costs for the care of the stored material and are subject to spoilage and obsolescence. The goal of programs such as just-in-time manufacturing is to reduce inventory levels. In spite of all these braggy features, inventories do have positive purposes. Raw material inventories domiciliate a stable source of the materials required for production.

A deep inventory requires less replenishment and may reduce parliamentary procedure costs because of economies of scale. In-process inventories reduce the impacts of the variability of the production rates in a plant and protect against failures in the processes. Final goods inventories provide for better customer service. The variety and easy availability of the product is an important marketing consideration. There are other kinds of inventories, including quit parts inventories for maintenance and excess capacity built into facilities to expunge advantage of the economies of scale of construction. Because of their practical and economic importance, the subject of inventory control is a major... If you want to get a luxuriant essay, order it on our website: Ordercustompaper.com

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