Inventory management - More than reorder points and quantities

In today's competitive environment, many companies, including utilities, are looking for ways to keep costs down so as to maintain or improve their market position. One of the significant costs for a nuclear utility is its material and supplies inventory, which, for many, has continually escalated. Many of us recognize that one element of any good materials management system is the ability to calculate the reorder point (ROP) and reorder quantity (ROQ) for the material so as to establish proper inventory levels and quantities. Nevertheless, when beginning to consider the elements contained in these algorithms, it is obvious that many additional factors constitute good inventory management. This paper conveys some of the necessary elements of an effective inventory system and the actions which should be taken to effectuate such a system. Furthermore, the interrelationship of these elements are demonstrated by considering the key facets of a good materials system.