Inventory Management

  1. Inventory Costs
    1. Holding Costs
      1. Capital Costs
        1. Cost of Invested Capital
          1. Opportunity Cost of Funds
          2. Storage Space Costs
            1. Warehouse Rent and Depreciation
              1. Utilities and Maintenance
              2. Inventory Service Costs
                1. Insurance Premiums
                  1. Property Taxes
                  2. Inventory Risk Costs
                    1. Obsolescence Risk
                      1. Damage and Deterioration
                        1. Shrinkage and Theft
                      2. Ordering Costs
                        1. Order Processing Costs
                          1. Administrative Expenses
                            1. Documentation Requirements
                            2. Transportation and Receiving Costs
                              1. Freight and Shipping Charges
                                1. Receiving and Inspection Labor
                                2. Setup Costs
                                  1. Production Setup Time
                                    1. Equipment Changeover
                                  2. Shortage Costs
                                    1. Lost Sales Costs
                                      1. Immediate Revenue Loss
                                        1. Customer Defection
                                        2. Backorder Costs
                                          1. Administrative Handling
                                            1. Expedited Shipping
                                            2. Customer Goodwill Costs
                                              1. Brand Reputation Impact
                                                1. Future Sales Implications

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                                            2. Types of Inventory

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                                            4. Inventory Control Systems