Inventory control model
IMportant of inventroy control
1.
Good inventory control is necessarry when the demand and the supply of goods are irregular
2.
Low inventory may cause frequent stocks-outs thus affecting the sale.
3.
A sufficient inventory level is needed to prevent unnecessary loss of sale.
4.
However, a high level of inventory is costly to hte firm as it has to invest a large money on it.
Economic Order Quantity Model (EOQ)
Reorder Point (ROP)
D =Annual Demand
d =daily demand
Co=ordering cost
Ch=holding cost
‫ =ﻠ‬lead time
Q/2= average inventory level