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ABSTRACT
The study seeks to address the problem of inventory management with the objectives of modeling inventory cost as retroactive and incremental holding cost. The purpose of the study, is to create a master ordering schedule that take in to account the imbalance nature of demand forecasts and unknown lead time.
A secondary data for this study was received from Mantrac Nigeria Limited (Department of Inventory) via Mantrac making available data. These include, stock list, cost per unit, data on demand, data on supply and inventory holding cost.
Retroactive and incremental holding cost model are employed to the study, the model however identified 4357 units as the ideal order quantity, 0.0999 year (A month and 5 days) as the cycle time and ₦ 25319.73 as the minimum total inventory cost. Meanwhile the incremental approach gives a 4939 units as the ideal quantity, 0.1119 (A month and 9 days) year as the cycle time to minimized total cost at ₦25118.
