01 Jan January’s Free MBTN Tutorial – Inventory Management Decision Making

Best wishes for a joyful and prosperous New Year from MBTN Academy! We’re looking forward to bringing you more analytical content in 2024 to improve your decision making skills. This month’s free MBTN Academy tutorial tackles key economic decisions in inventory management. Efficient inventory management decision making is essential for manufacturing and retail businesses, where striking the right balance between ordering costs, inventory holding costs, and optimizing quantities is pivotal.

In this month’s tutorial, we’ll cover the following concepts and calculations.

• Ordering Costs: These cover procurement expenses including paperwork, processing, and transportation. Strategies like batch ordering can reduce these expenses.
• Time Between Orders: Balancing order frequency is crucial. Longer intervals risk stockouts, while shorter ones inflate costs. Analyzing demand patterns is key.
• Inventory Holding Costs: These involve storing and maintaining inventory. Warehousing, insurance, and tied-up capital costs need balancing to prevent overstocking.
• Economic Order Quantity (EOQ): EOQ finds the sweet spot—minimizing total costs by considering ordering, holding costs, and demand rates.
• Quantity Discounts: Bulk buying offers discounts but can increase holding costs. Businesses must weigh benefits against potential drawbacks.
• Production Order Quantity: POQ determines optimal batch sizes in manufacturing to minimize production costs, considering setup, carrying costs, and demand rates.

Strategically managing these aspects optimizes inventory control. Using advanced tools and lean practices further refines efficiency.

The free link has expired, but check out this month’s tutorial under the Business Education Resources Blog.

If you find these tutorials valuable and you are faculty at a University or Community College, you might also be interested in our complete catalog of MBTN modules, available for use in academic settings. You can choose any combination of 3 or more modules to suit your needs.

Our complete catalog of MBTN modules

If you are an individual interested in learning more about Business metrics and key business concepts, please consider access to our 60+ learning modules.

MBTN All Modules and Certifications ($99.95)

Best regards,
Your Team at MBTN Academy

Follow us on Twitter, Mastodon, and LinkedIn