Inventory analysis is one of the branches of Operation Research which deals in studying and understanding the stock/product mix combined with the knowledge of the demand for stock/product. It is the technique to determine the optimum level of inventory for a firm.[1][2]
Inventory analysis is widely used to classify and manage stock items according to their demand patterns and strategic importance within a firm’s operations. Modern analytical approaches combine traditional inventory control with techniques such as ABC–XYZ classification and safety-stock modelling to determine optimal stock levels and reduce the likelihood of shortages. These methods enable firms to identify high-value items with stable demand, distinguish them from low-value or highly variable-demand items, and allocate resources more efficiently.[3]
