{{Short description|Method used to choose inventory levels}} '''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.<ref>{{Cite web|url=http://www.businessdictionary.com/definition/inventory-analysis.html|title=What is inventory analysis? definition and meaning|website=BusinessDictionary.com|language=en|access-date=2017-05-05|archive-date=2017-05-19|archive-url=https://web.archive.org/web/20170519030809/http://www.businessdictionary.com/definition/inventory-analysis.html|url-status=dead}}</ref><ref>{{Cite web|url=http://www.accountingtools.com/questions-and-answers/what-is-inventory-analysis.html|title=What is inventory analysis? - Questions & Answers - AccountingTools|website=www.accountingtools.com|language=en|access-date=2017-05-05}}</ref>
== Methods and applications == 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.<ref>{{cite journal |last=Kırmızı |first=Sema |last2=Ceylan |first2=Zeynep |last3=Bulkan |first3=Serol |year=2024 |title=Enhancing Inventory Management through Safety-Stock Strategies—A Case Study |journal=Systems |volume=12 |issue=7 |pages=260 |url=https://www.mdpi.com/2079-8954/12/7/260 |access-date=10 September 2025}}</ref>
== Computing inventory balances == * Average-cost method * First in first out * Last in first out
==References== {{Reflist}}
Category:Inventory optimization
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