The costs associated with inventory are holding costs and ordering costs. Inventory control systems are used to control the level of inventory by determining how much to order and when to order. This helps to manage the costs associated with inventory – ordering, holding, and shortage costs. In this discussion, apply some of the management concepts and techniques from Chapter 9 to the inventory that you manage in your personal life.
For this assignment, compose your response to the following questions:
- Provide an example of inventory that you manage in your home life, such as computer supplies. Estimate how much it costs you to hold this inventory.
- Estimate the ordering and shortage costs (shortage costs may not be financial ones).
- How often do you replenish this inventory, and which of the inventory systems does this most closely resemble?
- Mentally apply a different system. What would be the pros and cons?