ABSTRACT
This chapter presents an overview of inventory management and highlights the role of effective inventory management in the overall competitiveness of the Production and Operations Management function. It identifies the concept, the need for, and determination of Optimal levels of inventories in an organization. The chapter provides a renewed interest in the fundamental structure of inventory models. A model framework given by Naddor has been adopted in some of the models reviewed. The chapter presents comprehensive coverage of inventory management as a very prominent area of study in Production and Operations Management (POM). It presents some well-known inventory models for determining optimal inventory polices and gaining insights from them in order to better understand the implications of various parameters. Inventories can exist in various forms: raw materials, bought-out components, in-process inventory, finished goods inventory, and maintenance as well as repair and operating supplies (MRO).
