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Abstract
The logistical function of inventory management has greatly changed greatly over the last
few decades. Historically, inventories have been used to manage production and were considered
a necessary component of doing business. However, with recent developments such as Just-In-
Time (llT) and Electronic Data Interchange (EDI), this perception is changing. In addition, issues
such as transportation modal choice, plant location, and transit characteristics impact inventory
management. In this study, a set of four mail surveys were sent to flour milling firms in the United
States to measure how firms were reacting to these trends and issues.
Results indicated some confusion in the industry regarding EDI. There was strong
agreement from respondents that EDI will continue to grow in importance but its benefits are not
well understood. There also appeared to be differences in the industry regarding preferred supplier
programs, with some firms indicating close relationships with all of their customers while other
firms reported no close relationships with customers. In addition, there were some interesting
comparisons between rail and truck transportation relating to inventory management. Transit
characteristics were examined to look at rail and truck efficiencies. Finally, reported inventory
carrying costs appeared to be extremely low in the industry. Accurately measuring carrying costs is
important due to the large financial investment inventories represent.