Influence of Maximum Stock on the Supply Chain

Maximum inventory in the warehouse represents the upper limit of the quantity of goods that must not be exceeded in a certain period of time. It is a quantity, which is still economically justified in the relation of the costs of storage, order costs of new stock and the capability of meeting demands of consumers. Holding maximum inventory is justified in the case when suppliers are unreliable, where delays are possible, or if production and customer orders oscillate during the year. Companies insure themselves from shortages of goods by holding inventory levels. Maximum inventory in the supply chain could be found in every phase. There are several methods to calculate the maximum inventory rate. This paper presents the influence of maximum inventory orders on the supply chain by calculating the maximum inventory in the distribution phase. By knowing the amount of maximum inventory it is possible to optimize the logistics processes in the distribution phase, so the total disorders in the supply chain will be reduced.