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    Inventory model for a Small Bakery

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    Develop an inventory plan for a small German bakery. It sells different types of breads, rolls, pastries and cakes. What inventory model is best suited, is it ABC or EOQ. How to set-up an inventory plan, and what information is needed to do the ABS or EOQ calculations?

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    Solution Preview

    What inventory model is suited for the business?

    If your business maintains more than three types of products, I would suggest that you use the ABC model. A bakery business keeps inventory of the different ingredients for making breads, rolls, pastries and cakes. These ingredients may reached more than ten! In this case the EOQ model falls flat. EOQ model is applicable only for businesses with very few inventories.

    Using ABC
    ABC inventory system utilizes the 80-20 rule. There are items that are classified as "A" comprising 20% in quantity terms and 80% in ...

    Solution Summary

    The solution prescribes inventory models appropriate for a small bakery. Two suggested inventory models are Economic Order Quantity and ABC.

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