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Chapter 10

Inventory Models

10.1 Principles of Inventory Management 10.5 Quantity Discounts for the EOQ Model
The Role of Inventory
10.6 Single-Period Inventory Model with
Inventory Costs
Probabilistic Demand
10.2 Economic Order Quantity (EOQ) Model Juliano Shoe Company
The How-Much-to-Order Decision Arabian Car Rental
The When-to-Order Decision
10.7 Order-Quantity, Reorder Point Model with
Sensitivity Analysis for the EOQ Model
Probabilistic Demand
Excel Solution of the EOQ Model
The How-Much-to-Order Decision
Summary of the EOQ Model Assumptions
The When-to-Order Decision
10.3 Economic Production Lot Size Model
10.8 Periodic Review Model with Probabilistic
Total Cost Model
Demand
Economic Production Lot Size
More Complex Periodic Review Models
10.4 Inventory Model with Planned Shortages

Learning Objectives By the end of this chapter you will be able to:
l Explain the principles of inventory management

l Calculate and interpret the common inventory models

l Incorporate probability into inventory decisions

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