A review of current inventory theory and its applications

Abstract

This paper looks at the inventory-related models published during the last ten years from the systems point of view. A chart is given to show the broad oategories of inventory models. The paper first lists eleven quantifiable and four non-quantifiable variables (and their types) that go into inventory formulas, affect inventory decisions, and have already been identified by the researchers. Next, various research papers are grouped in six oategories based on similarities of approaches UBed by these papers. These categories are : (1) models for determining optimum inventory polioies, (2) lot size optimization, (3) optimization of various specific: management objectives, (4) models for optimizing highly specialized inventory situations, (5) application of advanced mathematical theories to inventory problems, and (6) models bridging the gap between theory and practice. Next a synthesized review of recently published models belonging to each individual category is presented, and salient features of individual studies are highlighted. Further, this paper discusses the difficulties that most commonly arise in applying these models to routine practical inventory situations; and it also lists the weaknesses (or limitations) of certain assumptions commonly made by the researchers for developing inventory models. In the end, the paper makes several suggestions about how the available results of inventory models can best be used in practice.