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Original scientific paper

Management of inventory in a company

Eleonora Kontuš orcid id orcid.org/0000-0002-6144-9501


Full text: english pdf 228 Kb

page 245-256

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Abstract

Firstly, the purpose of the empirical part of the study is to analyze the inventory balances of surveyed companies
and secondly, to explore the dependence between companies’ level of inventory and profitability
expressed in terms of return on assets. Thirdly, the aim of the theoretical research is to explore the cost and
benefits from changes in the inventory level as well as to define variables that determine net savings from
changes in inventory level. An optimal inventory level should be based on consideration of incremental
profitability resulting from increased merchandise with the opportunity cost of carrying higher inventory
balances.
The results will provide a model equation for calculating net savings from changes in inventory level as well
as a new mathematical optimization model. With this model a company can consider net earnings from
changes in inventory level and establish the optimal inventory level as well as improve profitability.

Keywords

inventory balances; profitability; net savings; mathematical optimization model; optimal inventory level

Hrčak ID:

132829

URI

https://hrcak.srce.hr/132829

Publication date:

24.12.2014.

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