Theoretical Foundations of Inventory Management

International business competition has made organizations understand that they must carry out work focused on breaking paradigms, adapting to changes in the environment to achieve high levels of efficiency, and developing secure relationships with suppliers and customers.

inventory-management-basics

It is inventory management that ensures correct supply levels to ensure continuity of production and customer satisfaction.

The objective of this article is to analyze the general theoretical foundations related to inventory management systems from the review of various concepts associated with inventory management and their classification, together with the existing methods for classifying them, as well as the existing inventory management systems and the ways in which they are evaluated and managed to fulfill their objectives. The common thread of this article is designed, which allows us to see a graphic representation as shown in figure 1.1; the contents are compiled demonstrating that inventory management is a regulatory tool for the entire logistics chain, in order to achieve a continuous flow of materials in production.

Inventory management

The inventory constitutes a reserve of materials, raw materials, production in processes or finished products, which does not have a systematic use and are originated by the low reliability, to guarantee a certain service to the client (Cespón Castro, 2012).

For Schroeder (cited in Alemán Rodríguez, 2013) inventory is a stored quantity of materials that are used to facilitate production or to satisfy consumer demand.

For Ballou (cited in Rodríguez Ortega, 2014) in all companies, the decision about inventory is an alternative between the service that must be provided and the costs that it generates, so that any decision about them has an economic essence and try to strike a proper balance between those two elements

Inventory is immobilized working capital converted into products, kept in warehouses and subject to risk. Under this premise, the inventory must yield an economic benefit greater than that produced by the equivalent capital deposited in a bank earning interest or invested in a low-income business. risk (Ascencio González, 2015).

To expand the information on the risks that threaten the inventory, a list of the most significant is presented below, according to (Conejero González, Hernández Avila, & Corzo Bacallao, 2003).

Natural disasters: Tropical storms or cyclones, floods, electric shocks, sea penetrations, earthquakes and earthquakes, etc. are some of the natural phenomena that affect inventory. In Cuba there are unfortunate examples of damages suffered by the passage of hurricanes.

Accidents: Fire, traffic accidents and other accidents.

Bad handling: Careless handling can result in the loss of products (breaks, spills, etc.).

Deterioration and shrinkage: Heat, humidity, bad closures, poor packaging, cause shrinkage or deterioration of some products. Also in cold rooms, the storage of products with organoleptic incompatibility, produces losses of their initial characteristics, decreasing their final value.

Losses: Losses are caused by theft, bad shipments, spills, expiration, among other causes.

Development of new technologies: The change in technology of certain equipment can make significant amounts of parts and aggregates obsolete.

Changes in consumer tastes: Changes in fashion, time of year or other factors, can seriously threaten the sale of a significant number of products and items stored in warehouses.

Transportation deficiencies: In transportation, damage may occur due to poorly covered or poorly fitting the cargo in the means of transport, causing damage to inventories in transit.

Infestation: Many food products must be protected against different types of pests, either by periodic fumigation or by ensuring storage conditions with controlled environments, which exercise effective prophylaxis against the attack of pests and diseases.

The criteria issued by the different previous authors support the meaning of the inventories, with which the author of the research agrees, reason why she believes that the inventories form a main link in the routes that the merchandise transits, from an origin to a destination, being important for the operation of the business economy. The uncertainty caused by the instability of suppliers, plus the constant variation in demand, force companies to produce with warehouses both raw materials and finished products. The responsibility that the existence of warehouses brings, requires an organization and control of them. The functions of the inventory should lead to financial compensation for the risks that it faces on a daily basis.

Inventory functions.

It can be seen that logistics establishes a material balance between origin and destination, between suppliers and customers, and in this context, inventory must play a decisive stabilizing role. Producers want to produce in large batches, with few assortments and few deliveries, while merchants, urged by consumers, want more and more assortments, in smaller and smaller batches, with increasingly frequent and reliable deliveries. Inventory management contributes greatly to meeting the demand for a product.

According to Santos Norton (cited in Maceda Díaz, 2012), the inventory has, among other functions, the following:

Guarantee a certain level of customer service. The hierarchy or importance of the product justifies the costs of maintaining inventories that ensure the corresponding supply.

In other words, for all companies, inventory decisions are made by comparing the alternatives between the level of service and its costs, revealing its economic essence through the comparison between these two elements.

Adjust the supply and demand curves. Fluctuating demand requirements with stable offers can be rationally met with inventory. Avoid inventory breaks. Uncertainty in the forecast of demand, in delivery periods or in the quality and quantity of products received, constitute a threat that can be mitigated with stored reserves that neutralize these contingencies. Protection against unforeseen situations. Inventory enables supply to be secured in unusual circumstances that can lead to increased demand or decreased supply or both. Protection against price increases. Inflationary trends in the global economy and discounts for higher volumes from supplier orders,turn inventory into an alternative to achieve greater efficiency. Cope with possible mistakes in purchasing management. The existence of inventories increases the tolerance of the logistics system to the estimation errors of purchase indicators. Ensure the logistics flow. To guarantee production or consumption, necessary articles and materials are moved between different points of a distribution network or between the different jobs in a factory. This inventory is known as inventory in transit.between different points of a distribution network or between different jobs in a factory. This inventory is known as inventory in transit.between different points of a distribution network or between different jobs in a factory. This inventory is known as inventory in transit.

An important aspect of inventory analysis and management is determining the structure of the products that comprise the inventories. Knowing their characteristics and grouping them according to common components is an essential point.

Inventory classification.

Inventories are essential for the production or provision of the service in general, and vary widely among the different industrial groups. The composition of this part of the asset is of a great variety of articles, and that is why they have been classified into criteria according to:

Its nature Its speed of rotation Its level of access Its position in the logistics process Its functionality

According to their nature, they can be:

Of raw materials and materials: These are products that will be used to form part of the finished product. In general, the behavior of these inventories follows a pattern governed by the rhythm of production and its corresponding consumption standards. Its replacement will raise the volumes to a previously determined maximum inventory standard. Of products in process: Refers to parts and pieces that will form part of the final product not yet finished. Of finished products: Once the product is finished it is packed (and sometimes also packed) and becomes part of the finished product inventory being ready for further distribution and sale.

According to the rotation speed, they can be classified into:

Current inventory: Refers to inventory that moves within typical ranges of rotation. Slow-moving inventory: Composed of products whose few outward movements lead to their relative immobilization. Its causes originate, fundamentally, in purchases that do not adjust to actual consumption due to forecast errors or obsolescence, due to the change in technology or demand patterns. Idle inventory: Made up of products with no outputs during a period of given time. Its most relevant origin is in the unjustified purchases and to a lesser extent in the obsolescence due to technology change. Obsolete inventory: Composed of products that fundamentally due to technology change, become useless, becoming idle.

According to the level of access they are classified into:

Strategic inventory: These are products that are reserved according to a national, branch or business strategy because they can serve as a replacement for vital equipment for a certain activity or that its acquisition and purchase is very complex or slow. State reserve inventory: They are the inventories held for contingencies or natural disasters. They must be rotated to avoid excessive aging according to their own nature. Untouchable inventories: They are reserves of the armed forces for use only in military cases and must be rotated properly

According to your position in the logistics process:

Inventory in stock: These are the products that are in a warehouse equivalent to the available inventory. Inventory in transit: These are the products that are moving on a transport equipment between two nodes (warehouses) of the logistics network.

According to its functionality:

Normal inventory: Normal inventory ensures the demand for a product, so when it exceeds what is expected, it is necessary to resort to the security inventory. (delivery time and product quality). Available inventory: The total stock that is physically in the warehouse is called available inventory. Therefore, available inventory is the sum of normal inventory and safety inventory. (Torres Gemeil, Daduna, & Mederos Cabrera, 2004).

From the foregoing, the author of this research assumes that the inventory arises as a protection against the variability of demand and the time of replenishment, which is understood as the detailed and specified relationship of a conglomerate of valued elements that are grouped into one certain accounting account, indicating for each of them a physical location within an organizational structure, so it is convenient to know the most used methods for classifying items in inventory.

Methods for sorting inventory items

Among the different methods for classifying items in the inventory among the most widely used are according to Torres Gemeil, Daduna, & Mederos Cabrera (2004):

ABC Cost Method or Pareto Curve Matrix Impact on Benefit / Risk on Supply

One of the most used methods for classifying inventories is the ABC (classic) or Pareto Curve, also known as the Pareto Method or Law, 80-20 and few vital - many trivial, it is based on classifying inventories by their use-value, to establish levels of importance.

Use-value refers to the number of units in a specific assortment in a period of time (for example: monthly or yearly), multiplied by their unit cost or sales price, as the case may be. That is, it refers to the value of the inputs or outputs of the inventory, depending on the point of view used. Groups A, B and C are established through the stratification of the inventory as follows:

The method is based on classifying inventories by use-value. Use-value refers to the number of units in a specific assortment in a period of time (for example: monthly or yearly), multiplied by their unit cost or sales price, as the case may be. That is, it refers to the value of the inputs or outputs of the inventory, depending on the point of view used. As a general method it consists of the following steps:

Use-value calculation for each item. Sort descending according to the calculated use-value. The accumulated sum of the use-value and the quantity of items is calculated. The frequency (%) of said accumulated sums is calculated. The last frequency will be 100% for each case (use-value and quantity of articles). The Pareto Curve is plotted as% cumulative frequency use-value vs. % cumulative frequency of item quantity.Selection points are selected at the inflection points of the curve, and groups A, B and C are established.

When applied to inventory stratification, the regularity described by the Pareto Law conforms to the following theoretical pattern:

Articles A: It is 20% of the total articles, which represent 80% of the use-value. They represent the least significant amount, the so-called "vital few". These are the products that must be kept in inventory and, consequently, a special control will be applied to prevent unjustified failures in their availability.

Articles B: It is 30% of the articles that represent 15% of the use-value. They represent the products that are not the most important, but their lack can seriously affect the operation of the company. Sometimes, the lack of homogeneity in the group makes it advisable to adopt different management strategies for subsets within the original B products, identified by a new stratification according to Pareto. With this information, the coverage that would be assigned to each subgroup can be objectively discerned and those whose permanence in the inventory would not be justified can be discriminated.

Articles C: They constitute 50% of the articles that represent 5% of the use-value, reason why they are denominated like the "many trivials". These products must be constantly analyzed to decide their permanence in the inventory, using as a general premise to justify their exclusion, making purchases limited to the moment they are needed, even at the expense of dispensing with them during the supply period. This strategy requires prior characterization and evaluation of suppliers, with a view to shortening the shortage periods that may incidentally occur.

The percentages indicated for each stratum are only indicative and should not be taken as rigid standards for stratification in each particular case. In reality, the reported proportions reflect regularities that are only met in sufficiently large sets and using indicators that do not distort the essential nature of the theoretical assumptions of the Pareto Law.

In addition to the use-value, there are other indicators that can provide important information for decision-making, such as the frequency of sales, the value of the utility that the product contributes, among others. In fact, the correct thing is to make a combination of several stratifications according to different classification criteria, to determine the products that really must be included in each group (Torres Gemeil, Daduna, & Mederos Cabrera, 2004).

Benefit Impact / Supply Risk Matrix

Another method to classify inventory items is from the use of two variables: impact on profit (IB) and risk on supply (RS), which according to Kraljic (1992), is a way to make decisions about supply sources, horizons of negotiation and «make or buy». Santos Norton (1998), uses it in his doctoral thesis in order to differentiate the items in inventory, with the aim of:

Analyze the nature of the security inventory that must be calculated in each case.

Guide the determination of different levels of inventory reliability and therefore dimension the magnitude that the security inventory should have.

The matrix, when used for the stratification of the inventory nomenclature, is based on the classification of each of the products in one of its quadrants, which, in fact, qualifies their relative importance in the total inventory and supports the decisions about your further treatment. This matrix is shown in Figure No. 1.2.

Quadrant of critical products: They are the most important products of the organization, those that can paralyze production, or those that represent the greatest profit and volume of sales, or those that are essential to provide an adequate level of customer service. However, they are also the products that are more likely to suffer inventory breakdowns (due to variability in demand, or due to remoteness, scarcity or unreliability of suppliers), and that their fundamental quality parameters are violated, so that they become the most critical group of products in the organization. As their location approaches the upper right corner, the more critical the product will be. They must have an intense monitoring, day by day and they must be guaranteed an adequate security inventory,In addition, lasting relationships with suppliers should be established and alternatives with other suppliers should be sought to reduce risks, if possible.

Quadrant of products of concern: These are products that do not have a great weight in business activity, but have a high risk in supply. They are the ones that cause concern, but not to the critical degree of Quadrant 1 because these products are not decisive for the company, so the risk involved must be reduced.

Indifference products quadrant: These are products that have little weight in the company's activity, especially when they approach the lower end of the quadrant and in turn do not represent a problem for their location and purchase, perhaps because they are widely used products and that they can be offered by several suppliers, that is, easy to acquire, so their supply does not represent any concern, especially when they approach the left end of the quadrant. In no case should you have a security inventory.

Quadrant of tranquility products: It is the group of products that, being important for the company, are easy to acquire, therefore they represent products that leave a certain «tranquility» to the entrepreneurs. Those products that are closer to the upper right corner, that is, those with less guarantee in supply and greater impact on the company's activity, can be analyzed to calculate security inventories.

The important thing is to check the products that are inside the circle around the center of the matrix, because they are those that can change their characteristics more drastically and, therefore, the attention that should be given should vary in the same way (Torres Gemeil, Daduna, & Mederos Cabrera, 2004).

Inventory systems are so varied and involve so many considerations that it would be impossible to develop models for all possible situations. Both Machuca (1999) and Heizer (2002) and Lieberman (2005); coincide in proposing that inventory systems are classified into systems with deterministic demand (if the demand is known), or systems with non-deterministic or random demand (it is a random variable that has a known probability distribution).

Inventory management systems.

Inventory management is the process of inventory management, in order to minimize its amount, without affecting customer service, through proper planning and control (Cespon Castro, 2012). The traditional approach, when it comes to inventory management, is based on the concepts of order point and quantity to order, as a basis for making the decisions of: what to order ?, how much to ask ?, when to order? and how to order?

For inventory management, a number of techniques are applied, based on heuristic methods and Operations Research that respond to different practical situations. The most used inventory management systems are:

Basic Economic Order Lot Model (EOQ Model). Continuous or Fixed Quantity Review System or Q System. Periodic or Fixed Frequency Review System or System. Min - Max System. Multiple Item System.

Basic Order Batch Model (EOQ)

The Basic Economic Order Batch Model (EOQ), also known as Wilson's Model in honor of its creator, has the merit of having served as the basis for almost all existing inventory management models. Although its practical application has limitations, derived from the set of assumptions it requires, under certain considerations it can and in fact is applied. Among the mentioned assumptions, the most important are:

Only order preparation cost and inventory cost are considered. Product demand is constant. Delivery time is also constant and immediate. Orders are requested at constant time intervals. There will be no stockout.

Where:

Q: Economical order size, in units / order

S: Order preparation cost, in monetary units

D: Product demand, in units / unit of time

i: Inventory rate referred to the same period of time as demand

C: Production or purchase cost, depending on the order placed

Q: Supply frequency, in units of time

H: Cost of inventory, in monetary units / unit of time - unit

Q / 2: Average inventory, in units

Other calculation expressions related to parameters of the EOQ model are:

Where:

H: Cost of inventory, in monetary units / unit - unit of time

Q: Order request frequency, in units of time

CP: Number of orders to be made in the period considered

CT: Total cost, in monetary units.

The assumption of the EOQ posed by the non-existence of a stock break, that is, there will always be availability in inventory, theoretically guarantees a level of customer service of 100% (Cesponi Castro, 2012).

Continuous review system or fixed quantity system or Q system.

In this model, given a certain quantity (reorder point) of a product in inventory, the order for a fixed quantity of said product is requested, although the time between one order and another becomes variable, this being the main characteristic of this system: fixed quantity and fixed frequency.

It is convenient to use this system when it comes to products that are easy to account for; of high cost that they want a strict control, the variety desurtidos is small and when there is closeness with the supplier or client.

Q: Requested quantity.

L: Delivery time.

A: Order or reorder point.

S´: Safety stock.

Figure 1.4. Order point inventory management system (System Q).

Source (Cespón Castro, 2012).

This model can be managed taking into account the four combinations in correspondence with the randomness or the constant value of the demand and the delivery time:

Consider constant demand and delivery time. Consider random delivery time and constant demand. Consider random demand and constant delivery time. Consider both demand and delivery time random.

Procedure for the design of the continuous review system, when the delivery period is constant and the demand is random (Cesponi Castro, 2012).

Determination of the optimal lot size (Q).

The formula (1.1) described above applies.

Determination of the security inventory (S ').

Where:

Z: Percentile of the normal distribution, obtained for the fixed service level.

: Standard deviation in the term L.

: Standard deviation of demand, referred to the same units as the term L.

Determination of the reorder point (R).

(1.8)

Where:

M ': Average demand in the interval L.

System administration based on calculated parameters.

We proceed to request a quantity "Q" every time the inventory reaches the reorder point "R", and we must be alert to changes in demand, since a very pronounced variation may mean that the system has to be redesigned (Cespón Castro, 2012).

Periodic or fixed frequency review system or P system:

Also known as a fixed frequency system or "P" system, it is characterized in that the supply frequency remains fixed, while the quantity requested in each order constitutes a variable quantity. This model can be applied when dealing with products that are very difficult to account for, at low costs that do not require strict control, when more than one order is included in the same request, and when there is a distance with suppliers (Cespón Castro, 2012).

Figure 1.5: System P.

Source: (Cespón Castro, 2012)

Qi: Quantity requested.

T: Target inventory.

L: Delivery time.

S´: Safety stock.

Q: Review frequency.

Procedure of application of the periodic review system with constant delivery time and random demand (Cespón Castro, 2012).

Determination of the periodic review interval.

S: Order preparation cost, in monetary units

D: Product demand, in units / unit of time

Q: Supply frequency, in units of time

H: Cost of inventory, in monetary units / unit of time - unit

Determination of the security inventory.

Where:

Z: Percentile for the service level set.

: Standard deviation of the demand referred to the term P + L.

': Standard deviation in the term P + L.

Determination of the target inventory.

M´: Average demand of inventory in the P + L interval.

Calculation of the amount to request.

Q = T - Inventory availability

System min - max .

According to Cespon Castro, (2012) constitutes a hybrid of the Continuous Review and Periodic Review Systems, by using some of its parameters. Due to its simplicity and effectiveness, it is one of the most used in practice, in addition to using the reorder point (R) and objective inventory (T) criteria.

Application procedure of the Min - Max System

Determine the optimal lot size (* Q) Formula (1.1) Determine the safety stock (S´) Formula (1.6) Determine the reorder point (R)

M´ = d * L (1.14)

Determine the target or maximum inventory (T)

T = Q * + R (1.15)

Q = Tq (1.16)

Q = Q * + (Rq) (1.17)

Where:

Q: Quantity to request

q: Quantity available at the time of the review.

System for multiple articles .

This system is formulated as a constrained optimization model and is solved using Lagrange multipliers (Zipper, 2002). It is applied as many times as there are materials, it allows determining the quantities to be requested for various inputs together, when there are resource restrictions. Typically in the purchasing function, the resources that most often become constraints are:

The budget available for purchases The space available in the warehouse for the quantities to be purchased of the different materials (Cesponi Castro, 2012).

Procedure of application of the system for multiple articles (Cespón Castro, 2012).

Solve the unrestricted problem. Check if the resource constraint (budget or space) is satisfied. If the constraint is not satisfied, calculate the Lagrange multipliers. Calculate the multiplier values and the quantities to buy, substituting in the constraint. Check if the new values obtained satisfy the resource constraint.

Procedures for designing inventory management systems

In the bibliography consulted, a great diversity of procedures was found for the analysis of inventory management systems. The one developed by Ortiz Torres (2004) was reviewed in his doctoral thesis, which proposes a procedure for the management of inventories with independent demand in commercial and service companies, based on the close interrelation that exists between the management of purchases and provisioning with inventory management. It groups all of these, as costs associated with Supply Logistics, Alonso Bobes (2008) and applies the above procedure in the Enterprise Transport and Insurance System.

Other procedures found are those exposed by González Ruiz de Villa (2009), Maceda Díaz (2012), Loja Guarango (2015) and Bofill Placeres, Sablón Cossío, & Florido García (2016); These investigations and their procedures have as common elements to develop an efficient SGI to eliminate the existing problems in the analyzed companies, the effectiveness of sales and the improvement of customer service.

Of all these procedures, there is no one that can be selected for application in food production companies, since they do not adapt to the characteristics of these entities, so it is decided at the author's discretion to integrate these procedures into a new one. to improve the inventory management system in food producing companies. Any procedure to be applied must take into account the norms, resolutions and organizational goals established by the different entities of the central direction of the country and that directly affect warehouse logistics.

Inventory management in Cuba.

The remoteness of the supplying countries - the hairy ear of the United States blockade appears - and the games of wholesale costs often force large purchases. But they are not the only causes of uncomfortable, dead-end storage. Identified as idle or slow moving, these inventories punish the economy with values that these entities keep in practice far from the needs of society. And they reveal deep flaws in an economic model in which planning must be more than a symbol (Terrero, 2018).

In Cuba, inventory management is a measure used by each company. If there is an incorrect inventory management, there will be large financial losses. There are a number of innovative business inventory management solutions that can be used to keep inventory under control. Inventory shortages can provide customers with discontent or a short production time for industries. A company that does not have all the products it needs to complete planned production and has to stop production lines to wait for the missing products to reach its warehouse, cannot do much work and those who ordered the product may be completely dissatisfied. This is one of the cases that Cuban industries face on a daily basis,because the raw materials that are imported must accumulate in excess for fear of the delay in the arrival time of a new replenishment.

It is possible to calculate some indicators that give quantitative results and make decisions, such as the balance of inventories, but it is not possible to determine with an acceptable degree of accuracy the weaknesses in organizational management that must be improved, and even the strengths are difficult to determine. (Lopes-Martínez, Gómez-Acosta, & Acevedo-Suárez, 2012).

In the work of López, Gómez & Acevedo (2012), a study is made of the situation of inventory management in Cuba, based on experiences from work carried out at the Logistics and Production Management Laboratory of the José Polytechnic Higher Institute Antonio Echeverría (LOGESPRO), in the period between 2000 and 2011 and lists the following results:

High levels of inventory, without support in consumption, resulting in low turnover that contrasts with the previous problem of low availability, but which has been the result of poor studies of demand and instability in supplies, causes a high level of obsolete products. availability of products in the market, affects customer service. Long and unstable cycles of order management. Sub-use of installed computer systems, problems in the registration of information and use of classifiers and encoders. As a result of the Previous problems, a chain of defaults has been generated that affects operations and cash flow in the supply chain.

In Cuba, various inventory management works have been carried out, both for independent and dependent demand. Ortiz (2012) cited in Lopes-Martínez, Gómez-Acosta, & Acevedo-Suárez (2012), claims to have applied the GISERCOM procedure in more than 60 Cuban companies, has obtained favorable results. This procedure, part of his doctoral thesis in 2004, proposes a group of stages and steps to carry out an inventory management study with independent demand, which includes methods for estimating demand, determining the costs to be used in the models, selection of suppliers and is quite complete.

5.1. Current rules and regulations

The standards offer important benefits, especially through a better conformity of the products, processes and services with the purposes assigned to them. It is for them that in Cuba inventory management is established among business practices, the use of the regulations established by the governing bodies in, of which are the following:

In MINCIN Resolution No. 153/07, the creation of the logistic file known by EXPELOG is required, it contains a set of aspects related to warehouse logistics, constituted in a folder or file and is made up of certain documents that include the inventory control these are: a) Inventory control of handling and lifting equipment, with the updated inventory of the existence, as well as the technical status of these equipment, such as: forklifts, conveyor mats, pallet trucks and wheelbarrows. b) Control inventories of storage media, existence and technical status of: interchange pallets, port and others, pallet boxes and shelves. c) Control of inventories of measurement media, existence and technical status,all with their certification of apt for the use and expiration of this condition of: platform scales for trucks, mechanical and semi-automatic scales and weights for beaks.

Within the same resolution is article 9, which reflects the procedure by which the rotation of the products is controlled, which guarantees that they leave the warehouse in the case of perishables, the one that expires first and non-perishables. the one who first entered.

In resolution 11/07 of the Ministry of Finance and Prices dated January 18, 2007 mention is made of various inventory models, they are:

Model SC-2-13 - Submayor of Inventory: which to control the stocks in the warehouse, of the products purchased or produced, in physical units and value, by recording the movement of inputs, outputs and balance in stock of them.

Model SC-2-15 - Physical Inventory Sheet: Make the reconciliation between the physical and accounting information to identify the differences or necessary adjustments.

And finally, it refers so well to Model SC-2-16 - Inventory Adjustment: Serve as the basis for Inventory adjustments, which arise as a consequence of physical counts or for any of the causes whose concepts are detailed in the model.

In the Guidelines of the Economic and Social Policy, version of 2016, it is established to exercise effective control over the management of purchases and the rotation of inventories in all entities, both wholesale and retail, with a view to minimizing the immobilization of resources and lost, so it is necessary in the preparation of the plan and the annual budget in terms of income, analyze the rules of inventories and rotation cycles, slow moving and idle goods and thus prevent the causes of their appearance.

On this subject, it should be noted that by DECREE No.315 / 2013 of the MINCIN it is decreed: Regulations for the treatment and management of inventories, particularly slow moving and idle ones and RESOLUTION No. 386/2013 of the MFP, approves the: Financial procedure for the sale, in Cuban pesos (cup) of idle and slow-moving inventories for state entities.

Conclusions

The literature presents the existence of several inventory management systems, which, in essence, pursue the same objectives: to minimize total costs for this concept and to improve customer service, through the definition of what, how much and when to order, however, they do not fit the characteristics of food producing companies.

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