Inventory management models and their effects on uncertain demand

This paper focuses on the use of inventory models to control the material flow and purchased inventory items in manufacturing companies. The objectives of this paper are to assess the effects of demand uncertainty on inventory management and to evaluate the difference on uncertain demand subject to demand controls as determined and the models used. Three inventory management models are studied; the Economic Order Quantity (EOQ), the Activity-Based Costing (ABC), and Just-in-time (JIT). The paper was a descriptive in nature and was conducted through the use of quantitative research methods. Survey questionnaire was compiled to gather primary data from five FMCG companies in manufacturing organisations. Survey data of 255 respondents from FMCG manufacturing companies was used in the analysis.