DETERMINISTIC INVENTORY MODEL AND ITS APPLICATION TO MOUKA FOAM INDUSTRY

AN OVERVIEW OF INVENTORY THEORY: In most manufacturing process, production systems, the financial services industry, the economy, agriculture, it is a known fact that they maintain stock of goods and services for future sale or use. The practice of stocking goods for future use or sale is known as inventory. It is a well known feature particularly with retailers, wholesalers and manufacturing companies. It is possible that the hotel manager will always make sure that a sizeable quantity of meat and fish is available in the freezer for use any time guests arrive. Inventory theory is therefore concerned with mathematical and analytic techniques that help in making policy as to when to replenish the stock of goods available and in what quantity. In small firms, it is possible for the manager to keep track of inventory and make decisions. However, since this may not be feasible even in small firms, many companies have saved huge sums of money by using scientific inventory management. These scientific inventory management in particular are:

Formulate a mathematical model describing the behavior of the inventory system.

Derive an optimal inventory policy with respect to the model formulated.

Frequently use a computer system to maintain a record of the inventory level and to signal when and how much to replenish.

The maintenance of an optimal inventory policy occupies a significant slot in management policy decisions in many real life business situations this day. This is so because of the significant impact in the company, which a loss of goodwill engendered by a faulty inventory policy could have in terms of drop in patronage, revenue and customers loyalty.