Inventory Management Research Paper Example | Topics and Well Written Essays - 4000 words

Inventory Management - Research Paper Example The project will only review the relevant literature on inventory management. The review will cover the elements of inventory management then go through four main sections of intelligent inventory management. The first three parts will cover the principal domains of inventory management: inventory modeling, expert systems, and the decision support systems. The fourth part is the intelligent decision support system discussion, which advances the two previous parts. Inventory is the stock of goods kept on hand by an entity for future and current use of meeting the customers demand. The inventory is of importance to an entity in both the financial and operational perspective. First, inventory contributes the main investment for any firm. Inventory constitutes approximately 30 to 55 percent of current assets in manufacturing companies while constituting approximately 70 to 85 percent of current assets to wholesaler and retailer companies. On the other perspective, from the operational po int of view, inventories put operating flexibility to company. Keeping of adequate inventory by manufacturing processes will facilitate smooth production process. Holding of inventory by wholesaler and retailers facilitates good customer service which in return gives the companies good public image. The main aim of inventory management is to balance between having low inventory and the high return on investments. Inventory has a variety of functions, which should be summarized to facilitate a good inventory management. First, the main aim of holding inventory is to meet customers demand for the product. This is because it is impossible to have delivery of products or production of goods exactly the same time when the consumers need them. It is therefore wise to keep a reasonable level of inventory to meet this expected or anticipated consumer demand. Secondly, it is wise to keep adding inventory inform of buffer or safety stocks since the demand is usually not known with certainty.