Anticipated Inventory Storage Decision

  Business and Marketing
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  Business and Marketing
The most significant decision made by many manufacturing, retail and service delivery industries is on the amount of inventory they can keep on hand. Evidently, inventory is the greatest asset to any business. Inventory can be described as the amount of materials or goods on hand at a specified period (Chakrabarty & Wang, 2016). While companies are making their budgeting systems, they always establish their inventory levels before making any decision. The inventory decisions involve a crucial balance between three types of costs which includes holding costs, ordering costs and shortage costs (Plinere & Borisov, 2015). Many businesses always make the necessary steps to have a safety stock which protects them against the negative impacts of uncertainty. In most cases, inefficient inventories lead business failure.
Due to the volatility of demand, most of the companies decide to hold their inventories to meet the unexpected demands. Business people always understand that consumers exp...