Introduction of Inventory Management Inventory Management (IM) is to the process of ordering, storing, and using a company's/firm's inventory. These include the management of (1) raw materials, (2) components, and (3) finished products as well as warehousing and processing such items. IM uses a variety of data to keep a record of the goods as it moves through the process, including lot numbers, serial numbers, cost of goods, quantity of goods and the dates when they move through the process. IM helps in minimizing cost, optimize fulfillment, provide better customer service, and avoid loss from theft, damage, and return. In this sense, Inventory Management is the science of purchasing, supervising, controlling and dispensing of Stock for Sale which is stored in a facility. It covers all aspects of stock management across the supply chain from the manufacturer to the point of sale manned by the retailer.

The process of inventory management begins from the time you raise a purchase order and ends (for every order) when an order is fulfilled/ delivered to the end customer. As an inventory manager, your job is to manage inventory smoothly and at as low a cost as possible so that you canSell the right productsBlock the least possible working capital at all timesFulfill orders on time so as to build customer loyalty Sustain your sales model.

Effective inventory management affects every aspect of the businessfrom warehousing costs tothe ability to fulfill orders accurately and on time. The inventory manager wants to be on top of everything from raw materials to finished goods. Unfortunately, inventory management is a difficult business process to do by hand. It takes time, and if you make a mistake, it could impose ripple or disruptive effects that negatively impact the business for months or years

Simulation Practice for Inventory ManagementA local company stocks product BMW001 each week. The company's cost for BMW001 is $ 100.00 per unit and it sells the product for $ 300.00 per unit. Units not sold in one week are held over and sold the next week at a cost of $ 30.00 per unit, charged on beginning inventory. The company charges itself $20.00 per unit for lost sales.The distribution of demand is shown below. There are 10 units in beginning inventory at the start of week one.

DemandProbability2000.052300.102400.302500.302600.103000.103500.05

Cost of Goods is based on units sold per week. Units ordered in a week are available for sale in that week.For your simulation, please determine the following:A) Average per week total stock level.B) Average per week sales in units and dollars (revenue)C) Average per week beginning inventory and inventory charges.D) Average per week lost sales in units and lost sales cost.E) Average per week total cost.F) Average per week profit and the standard deviation of the profits

Simulate 10 periods of demand with an order policy of ordering 240 units per week. The Random Numbers (RN) are given as below:80, 14, 33, 27, 98, 02, 86, 41, 79, 55 What are the solutions?2.Based on the developed model, we shall simulate 100 periods with randomly generated uniform-distributed umber from 1 to 100 for each period. What are your results to the above questions?3.Based on the 100-period simulation model, what is the optimal order quantity for each period?