Operation Management Discussion Posts: Maintaining inventory on shelves and in warehouses can be quite costly.
Maintaining inventory on shelves and in warehouses can be quite costly. How would you determine the amount of inventory you should have on hand?
How does an organization decide whether or not to hold inventory? Why are these reasons important?
Organizations usually incur many costs in all the activities that pertain the running of the business. One of the costs that they incur are the storage costs which are usually incurred when the organization stores their goods in either shelves or warehouses (Hill, 2012).
However, a business can determine how much inventory it needs to handle depending on the products turnover if it is fast or slow hence they will know how to store the products. Also the lead time plays a role in the sense that….
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