Inventory management and materials requirement planning Assignment

Inventory management and materials requirement planning - Assignment Example Introduction Inventory management can be defined as the practice of managing the inventory of an organisation so as to ensure that it does not go out of stock and that the needs of the organisation are continually met (Pillsbury, 2005). Inventory management is carried out in order to protect the organisation against stock-outs when there is variability in terms of demand. Inventory management and materials planning in a military setting is very much different from the business setting due to the nature and sensitivity of the inventory itself. The fact that there is always need to provide the right materials to the military personnel at the right time especially during war has resulted in a situation where the inventory management practices adopted are very risk averse leading to the holding of a lot of inventory at a time in their stores. This is due to the fact that there is need to consider the risk of lacking particular materials when they are needed by the personnel on the ground (Hillier and Lieberman, 2001). Royal Air force of Oman Inventory system The Royal Air force of Oman is no exception to the inventory management practices adopted by the military. ... Some of the items in the inventory have been there for many years and the military is now being faced with the risk of obsoleteness as new technology development has resulted in new more advanced military equipments (Max, 2005). Military organisations all over the world have traditionally focused on keeping high levels of inventory in order to be able to deliver the needed services and equipments to their personnel. This has therefore led to a situation where the military organisations have to take a risk averse position and adopt inventory management practices which allow the storage of high levels of inventory for readiness purposes. This is a practice that most military logistics personnel adopt and has resulted in a common believe that holding more inventory is better when it comes to being ready for warfare and being ahead of other military forces. It is however important that these military organisations adopt better inventory management practices so as to reduce the costs of s torage and the risk of obsoleteness. This will help them manage their inventory levels in a more cost effective manner thus lowering some of the heavy costs they have been incurring over time (Melcher and Ferrari, 2004). Inventory Management Systems There are several inventory management systems that can be used by an organisation to manage their inventory. These are; reorder point systems, periodic review systems and material requirements planning. The inventory management system adopted by military organisations such as the Royal Air force of Oman is based on the material requirements planning system. This is due to the fact that most of the materials purchased by the military are based on needs and therefore