Inventory Management Analysis of a HomeGrown Coffee Shop Using the System Dynamics Approach

Abstract

Inventory management is a method of optimizing the flow of goods in and out of an organization. The objective of inventory management is to get the most benefit from a business inventory with minimal venture costs. It is vital to ensure the business’s longevity. In this article, the modeling of the system dynamics pertaining to inventory management was carried out. This study aimed to attain an accurate analysis of the management of the inventory of home-grown coffee shops in terms of sourcing, storing, and to sell coffee – both raw materials and finished goods thereby enabling the company to make inventory related decisions that will benefit the firm. The perennial problem confronting the company lies in the mismanagement of inventories. The results of the study obtained from the methodology applied in this undertaking, was a correct and adequate analysis of the dynamics modeling of a system in inventory management to ensure that the right stock, at the proper levels, and at the right cost, as well as price, is made available to the coffee shop customers. This was attained using the simulation software known as Stella and quantitative methodology-based mathematical calculations. This is a case study of a home-grown coffee shop.