Introduction
Inventories are the raw materials which the company has stored for use in production. Inventory management refers to the policies and inventory models that the company uses to conduct its operations. There are different kinds of inventory management models which are dependent on the nature and types of inventory that the company holds.
There are certain factors that have to be considered when considering the optimum inventory model. There is the ordering cost which is the price the company pays to the supplier for placing an order. It is assumed that the ordering cost has a variable and a fixed cost ...