1. Functions of Inventory
To meet anticipated customer demand
To smooth production requirements
To decouple operations
To protect against stockouts
To take advantages of order cycles
To hedge against price increases
To permit operations
To take advantages of quantity discounts

2. Inventory Counting Systems
Periodic system
Perpetual inventory system
Two-bin system

3. Inventory Costs Holding or carrying costs Ordering costs
Shortage costs

4. Classification System
A-B-C approach
Cycle counting
Accuracy
When
Who

5. Economic Order Quantity Models
Basic EOQ model
Economic production quantity
Quantity discounts
Reorder point
Safety stock
Shortages and service levels