Inventory Management and Costs

Paper Summary:

The paper looks closely at issues surrounding inventory management and examines the costs and benefits associated with this type of inventory control. The writer then makes a strong claim that the company JIT can be the most cost-efficient and highly effective way for a company to accomplish the complicated task of inventory management, though the use of the ever-growing electronic commerce.

From the Paper:

"Reduction of inventories is the main reason that companies have sought alternative inventory management methods. The use of smaller batches leads to the need for less inventory at any particular point in the production process. Cash flow is improved due to less capital investment in inventory. Less inventory on hand leads to savings in other areas as well, such as smaller space requirements, decreased materials handling costs, decreased record keeping costs, decreased insurance and tax obligations, and less scrap and obsolescence (Larson, 1998, p. 44)."

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