Effective inventory management is essential for most businesses' successful operations and supply chains. This is because inventory management impacts operations, marketing, and finance. Poor inventory management hampers operations diminish customer satisfaction, and increases operating costs.
Here we will learn the inventory ordering policies.
Inventory ordering policies address the two basic issues of inventory management, which are how much to order and when to order.
A number of models are described that are used for these issues.
Inventory that is intended to meet expected demand is known as cycle stock, while inventory that is held to reduce the probability of experiencing a stock out (i.e., running out of stock) due to demand and/or lead time variability is known as safety stock.
The first issue was discussed in the previous three videos.
Here, the second issue is addressed. Where different models were explained to find the reorder point (ROP) for different situations

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