Inventory Model for Different Kind of Products – theCapacity of Storage Space as a Constraining Factor

Inventory management is one of the most important logistic tasks in the decision making process. Many companies are faced with problems of finding an optimal order policy when there are constraints on some operations. Problems of this type can become rather complicated, so we will illustrate some principles by looking at problems with constraints in inventory levels. This paper presents an inventory model where there is a limited amount of storage place. The research is based on data from the warehouse of a company in Strumica, Republic of Macedonia, which has a chain of supermarkets where there is a different kind of products. Our purpose in this paper is to calculate the optimal order quantities for different kinds of products which are determined by the capacity of warehouse place and also minimizing the total order costs and different inventory costs. In the research we use analytical and simulation methods and the results and suggested solutions will be discussed.