ABSTRACT
The entry describes aspects of inventory management. Elements include the type of inventory (independent or dependent), inventory policy, and inventory classification. Inventory policy includes whether to use a fixed reorder quantity or fixed reorder period. It also includes a discussion of the Economic Order Quantity (EOQ) that seeks to minimize the cost of maintaining the inventory. Classification is performed by separating inventory items into ABC categories that reflect volume and price/cost categories. Inventory accuracy is important to making sound replenishment decisions. The cycle counting approach to maintaining the needed accuracy is described.
