Inventory Models: An Alternative

The control of inventory in physical distribution management is perhaps one of the most difficult tasks for the industry practitioner. Inventory is one of the largest cost elements in distribution and an error in judgment may result in serious trouble for the firm. According to Bowersox the basic function of inventory is to increase profitability through manufacturing and marketing, but the exact quantities of inventory to be carried are not often agreed to by management. Some departments such as marketing may want an abundance of inventory, while finance desires that levels be kept down. Because of such conflicts the exact determination of what levels of inventory a firm should carry is not easily performed.