Introduction to Inventory Management
In this chapter, we discuss the meaning of the term inventory. Different types of inventory are used by firms depending on the nature of their business. We discuss the types of inventory as well as the purpose of holding those. Inventory managers are expected to ensure availability of an item in the right quantity when a demand arises. To achieve this objective, they need to consider the characteristics of each of the items they are managing, such as demand, replenishment lead time, the timing of review, and item lifetime. We examine these characteristics in detail and describe how the element of uncertainty increases the complexity of making reliable inventory decisions.
Toward the end of this chapter, we present a classification of inventory models that give the reader an idea of the breadth of available solutions.
KeywordsInventory Inventory types Inventory functions Inventory characteristics
- Anderson, D. R., Sweeney, D. J., Williams, T. A., Camm, J. D., Cochran, J. J., Fry, M. J., & Ohlmann, J. W. (2016). An introduction to management science: Quantitative approaches to decision making (14th ed.). Boston: Cengage Learning.Google Scholar
- APICS Dictionary. (2015). Fifteenth Edition. Chicago: APICS.Google Scholar
- Chopra, S., & Meindl, P. (2010). Supply chain management – strategy, planning and operation (4th ed.). New Jersey: Pearson Education, Inc.Google Scholar
- Gaither, N. (1987). Production and operations management – a problem-solving and decision-making approach (3rd ed.). Chicago: The Dryden Press.Google Scholar
- Harding, M., & Harding, M. L. (2001). Purchasing (2nd ed.). New York: Barrons Business Library.Google Scholar
- Hill, A., & Hill, T. (2012). Operations management. New York: Palgrave Macmillan.Google Scholar
- Mahadevan, B. (2015). Operations management – theory & practice (3rd ed.). New Delhi: Pearson Education.Google Scholar
- Naddor, E. (1966). Inventory systems. New York: Wiley.Google Scholar
- Nahmias, S. (2005). Production and operations analysis (5th ed.). Boston: McGraw-Hill International Edition.Google Scholar
- Silver, E. A., Pyke, D. F., & Peterson, R. (1998). Inventory management and production planning and scheduling (3rd ed.). New York: Wiley.Google Scholar
- Vrat, P. (2014). Materials management – An integrated systems approach. New Delhi: Springer India.Google Scholar