The decomposition and composition of the Inventory Costs
Changbing Jiang
Abstract
Changbing Jiang
Abstract
In this paper,we divide the Inventory into four parts,including Inventory holding Costs,Ordering /Setup Costs,Stockout /replenishment Costs,and in-transit inventory holding Costs.A detailed analysis of the composition of the cost of each one,and gives their calculation methods.On this basis,we analysis the composition of the different type of the company's Inventory Cost.
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In this paper,we divide the Inventory into four parts,including Inventory holding Costs,Ordering /Setup Costs,Stockout /replenishment Costs,and in-transit inventory holding Costs.A detailed analysis of the composition of the cost of each one,and gives their calculation methods.On this basis,we analysis the composition of the different type of the company's Inventory Cost.
Key concepts: Stockout, Composition (language), Decomposition, Inventory valuation, Holding cost, Operations research, Inventory theory, Operations management