ABSTRACT
Before the advent of computer systems, simple manual approaches such as order point were effective in managing inventory. Companies could afford to keep inventory on hand to satisfy customer demand. Labor was the main driver of product cost so keeping that expense resource active was the primary focus. This strategy was supported by longer product life cycles and less product variety. The normal policy in purchasing was to keep a little of everything on order all the time just to make sure that it never ran out. We were in the age of reorder point systems where the assumption was that the customer would continue to order what they had before and the future would look very much like the past. In most industries this was a good assumption. If a part was not needed before, there was no need to order it now! Product life cycles were measured in years. If a little extra was ordered, it was not a big issue since it could be used up before it became obsolete. Inventory was an asset not only on the balance sheet, but also in the mind of the average manufacturing manager. Warehouses, automated storage/retrieval systems, and carousel systems were designed, developed, and installed to manage, sort, and retrieve inventory. The techniques of the day focused on the most efficient manner of managing these large volumes of inventory.
