engleski

Inventory management: a practical example from wood processing industry

Inventory is a vital factor in the business operations of manufacturing and trade companies. The essence of inventory philosophy is to make sure that stocks do not fall below the minimum level or reach excessive quantity to prevent them from losing value with time. There are concepts, i.e., models available to be implemented by business entities that can provide for an efficient inventory management and facilitate business operations. This paper aims to present the theoretical framework of inventory management, discuss a real-life example of inventory management and offer possible solutions to the problem. The observed company's main activity is wood processing. One of the main problems of the observed company was the fact that it needed a more efficient inventory management because it often happened that it either had too much inventory or not enough to continue the production. Inventory management could be improved by using simple mathematical methods to determine the optimum order quantity for specific raw materials and the minimum inventory level for a product, as illustrated by a simple example. In addition to introducing essential structural changes to the management, in order to improve company’s stock management it is proposed to implement advanced information technology which will help find the right planning and inventory control models.

optimal stock management, stock models, business entity (company) , management, production (manufacturing)

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