Inventory Management: Pivotal in Effective and Efficient Organizations. A Case Study

Abstract

The problem of determining what to order, when to order, how much to order and how much to stock so that costs associated with ordering and holding are optimal without interrupting production or sales, have been one of the major challenges facing manufacturing industries in the world. This paper employed classical (Q, R) inventory policy in determination of optimum order quantity, optimum reorder point and optimum safety stock for the raw materials that will ensure smooth operation in the industry under study. In this study, a simplified continuous inventory control model that can give an instant update of inventory status was proposed. This model was coded in Excel tool pack and was confirmed to give instant update of inventory level at any point in time. The simplified continuous inventory control model proposed will help in solving the problem of overstocking and understocking of both raw materials and finished products in Eagles Height Industries Ltd. Nigeria and similar manufacturing industries