INVENTORY MANAGEMENT IN DYNAMIC CHANGES IN THE MARKET ENVIRONMENT

Abstract

In the area of production planning and material resources, manufacturing companies often find themselves in difficult situations. On one hand, pulses in the form of market incentives difficult to estimate come to the enterprise, on the other hand, every production entity tries to plan all production processes as realistically as possible. Therefore, two systems that are diametrically opposed come into conflict. The fundamental problem often arises in the area of inventory management. The production tries to satisfy the highly stochastic demand to the maximum extent, but it tries to manage the resources it uses by deterministic methods. In inventory management, one of the key roles is played by the variability in their consumption. If the majority of planned production orders is based on orders, or if expected consumption can be predicted with high probability, a range of exact logistics tools can be applied in inventory management. With increasing degree of variability in consumption, combined with long delivery times, however, the information value of these methods is significantly reduced. This article analyses the use of the concept of safety stock as a tool for correction of strong changes in the current market environment.

Keywords

• logistics
• market
• stocks
• risk
• loss