The production of enterprises is constantly consuming inventory, and enterprises are also constantly purchasing materials and replenishing inventory, so the inventory of enterprises is always in a state of constant change. How to minimize the inventory backlog under the premise of ensuring production is the core of inventory control.

The goal of inventory control is to meet the expected demand with the lowest inventory cost under the constraint of the existing resources of the enterprise. The basic decisions of inventory control include: determining the interval between two adjacent orders; Determine the order quantity of each order; Determine the delivery time of each order; Service level to meet users' needs.

Regarding inventory, the following factors need to be considered:

1, demand characteristics

The different demand characteristics of commodities have a decisive influence on inventory control decisions: they are as follows.

Demand is certain or uncertain.

If the demand for goods is definite and known, then the inventory can only be prepared when there is demand, and the quantity of inventory is determined according to the plan. If the demand is uncertain, it is necessary to maintain a certain reserve to supply the demand that appears at any time.

Demand changes regularly or randomly.

If the demand changes regularly, such as seasonal changes, inventory can be prepared in a planned way according to the changing law. For example, before the arrival of the peak season, prepare more inventory reserves in case of sales growth.

If the demand changes irregularly and randomly, it is necessary to establish regular inventory and even prepare certain insurance reserves to prevent sudden demand.

The need for independence or the need for relevance.

The demand for independence generally refers to the demand for the final product: the demand for the final product occurs randomly and is beyond the control of the enterprise. It can only be obtained by prediction and cannot be calculated accurately.

Associated demand comes from inside the enterprise, which generally refers to the demand of parts. The demand of parts is related to the demand of the final product: according to the demand plan of the product, the demand of parts can be directly calculated.

The substitutability of demand.

If some materials can be replaced by other materials, then their inventory reserves can be appropriately less, and in case of shortage, alternative materials can be used to meet the demand. For materials without substitute materials, it is necessary to keep more inventory to ensure the expected supply demand.

2. Order/production lead time

3. Unit price of materials

4, storage costs and procurement costs

5. Service level