[X Introduction]

Abstract

Inventory means any stored resource that is used to satisfy a current or a future need; for example, the raw materials and finished goods. Therefore the inventory control is crucial for every company. Reducing on-hand inventory level means reducing costs and thus increases the cash flow. On the other hand frequent stock-outs may dissatisfy the customers. Thus a company must make a balance between low and high inventory levels. The major factor to be considered in achieving this balance is the cost minimisation.