Upon completion of this chapter, the reader should be able to:

5.1 Explain the differences between independent and dependent demand.

5.2 Determine what to stock, how much to stock, and how much service to offer customers.

5.3 Demonstrate use of an ABC analysis to determine which inventory items account for the greatest dollar value.

5.4 Demonstrate how to manage inventories for independent demand using EOQ, EOQ for discounts, and calculation of safety stock.

5.5 Demonstrate how to manage inventories for dependent demand systems.