Lp07 Assignment: Inventory Management.

Inventory ManagementNameInstitutional affiliationInventory ManagementBoston Beer Company is an American beer producer and supplier company. The brewery began making beer in 1984 and has grown over the years to become one of the top beer producers in the United States (Boston Beer Company, 2019). Like other manufacturing and producing companies, the brewery faces challenges in its inventory management. In ensuring profitability, a company must efficiently and effectively manage its inventory costs. Inventory management is among the most important and vital function of the operation management (Wild, 2017). Therefore, proper inventory management ensures that the company avoids losses by keeping inventory costs as low as possible. Boston Beer Company incurs four different inventory costs that include item cost, setup cost, holding cost, and stock-out cost. The operation management department of the company ensures that the firm’s inventory costs are low as possible which gives the company the chance for making profits (Axsater, 2015).Item cost involves the cost of purchasing individual item used in the production process (Axsater, 2015). To address the item cost, Boston Beer Company conducts regular item cost analysis