The quantity and quality of merchandise are very important in attracting the consumers’ interest. Consumers tend to choose vendors that have high quantity and quality of merchandise inventory so that they can choose products that fit to their needs. If the sales voleme is low, the merchandise inventory will take more time to keep that might slow down the company’s operation. Inventory determination is very important thing to do by corporatesi to avoid from the risk of inventory shortages due to high inventory demand, as well as the cost of keeping the inventory longer in the warehouse through a lower usage. The nventory that has to be kept in the warehouse will need an extra cost namely holding / carrying cost. Safety stock also needs an extra cost, but the company will get an extra profit due to the so called reorder point, where the inventory demand was not fulfilled when they were ordered will be fulfilled after the inventory are available n the following order. As such, the extra cost can be minimized through the time determination and inventory quantity that will be ordered, and the order can be placed at once.
Keyword : Inventory, Ordering Cost, Carrying Cost,