Methodology Transfer Paper 2: Evaluating Inventory Control Decisions

This is one of a series of methodology transfer papers developed to provide GAO evaluators with a clear and comprehensive background of the basic concepts of an evaluation methodology. This document is intended to assist Government managers in evaluating the efficiency of inventory decisions. The basic premise of this document is that inventory systems are managed most efficiently when inventory levels are such that the sum of the costs of carrying inventories, replenishing inventories, and running out of stock is minimized. General and specific applications and procedures for using evaluation methodology are provided.