05
MGMT 6332 / Inventory Management
Inventory Management
Balance availability, cost, uncertainty, and working capital.
The Management Question
What decision does this operating system need managers to make?
What is it?
Balance availability, cost, uncertainty, and working capital.
How does it work?
Learn the concept -> work through the operating logic -> apply it to the project.
Why does it matter?
The topic gives students a practical lens for improving real operating systems.
Next step
Open the lecture
Move into the interactive lecture experience for this topic.
Agenda - Week 05
Stockout or overstock?
6:00–6:08 · Take a position on a live availability failure before any formula appears
Why inventory exists
6:08–6:18 · Roles, types, and where inventory sits in the operating system
Costs that fight each other
6:18–6:26 · Holding, ordering, shortage, and obsolescence as competing pressures
ABC analysis
6:26–6:38 · Sort SKUs by value and decide where tight control is worth the effort
EOQ as a decision model
6:38–6:52 · Feel the trade-off, then interpret what a quantity actually commits
Reorder point and safety stock
6:52–7:04 · Protect service when demand or lead time will not sit still
Case 3 policy template
7:04–7:20 · Turn tonight into a usable inventory policy for the project organization
Learning Objectives
After this week, you will be able to:
Explain why inventory exists as a buffer, a cost, and a strategic policy choice.
Classify holding, ordering, shortage, and obsolescence costs and show how they conflict.
Apply ABC analysis to decide where tight control is worth management attention.
Use EOQ logic as a trade-off model for order quantity, not as a calculator to worship.
Set reorder-point and safety-stock thinking when demand or lead time is uncertain.
Draft an inventory policy template for Case 3: product, stock assessment, ABC, and order quantity.
