**3.21 Backorder inventory models**

A customer wants a new model two-wheeler bike Yezdi Roadster'22 model. It is not available in the stock in motor cycle show room. However, if the customer is willing to wait a few days or weeks, the retailer is able to order the bike. This type of shortage is called as backorder. In this backorder situation, the customer waits until the order

arrives and then order is filled. The retailer should maintain a short period of waiting to receive the order and which is delivered immediately. The negative inventory level is occurred or incurred during the back order. It incurs a backorder cost in terms of the labor cost and special delivery cost while handling the backorders. In backorder situation, the retailer should maintain a goodwill customer or to avoid loss of goodwill because some customer will have to wait for their orders. If backorders can be tolerated by the customers, the backorder cost measures associated with the loss of goodwill when a customer wait for an order. See Ref. [3].

The items with high backordering costs will be handled with few backorders. Allowing the optimal number of planned backorders is projecting a minimum percentage savings in cost from the no shortage in inventory model.

#### **3.22 Lowering inventory cost**

As teamwork, coordination, and improvement of information sharing, opportunities are available for better cost control in the operation of inventory system. Some industries have a contract supplier under which the supplier regularly gives information regarding the status and schedule of upcoming production runs. The supplier's information concerning scheduled production runs provides a better understanding of the lead time involved for a product and the resulting lead-time demand. Information sharing by the supplier thus enables the order quantity, reorder point system to operate with a lower inventory holding cost.

Inventory may be checked and orders placed on a weekly, biweekly, monthly, or some other periodic basis. When a firm or business handles multiple products, the periodic review system offers the advantage of requiring that orders for several items be placed at the same present periodic review time. Some periodic review time with this type of inventory system, the shipping and receiving of orders for multiple products are easily coordinated.

#### **3.23 Inventory management system**

The industry bears a great deal of responsibility for producing high-quality goods by using appropriate natural resources and ensuring that they are delivered in good condition at the appropriate time. There are always some central issues such as preservation maintenance, product quality, and the need for good production in warehouse management. The right use of good products not only maintains good health but also makes it economically viable. It is more expensive to produce and distribute good-quality products than to produce low-quality items.

Some industries facilitate to use the advance technology for producing good quality of the products that stimulate the customers to buy quality products. This is because it does stick or seal on the product that provides the best-quality coating products. This technology would reduce product losses and increase the number of products available, ensuring the highest possible quality of products.

Many industries face a challenge in bringing good products to market with storage facilities using safety techniques to reduce perishability. Some technology is used to preserve liquid products and the industry invests in the cost/benefit of technology, which improves quality and reduces the rate of spoilage with good products.

Inventory management is affected by many factors such as unwanted defective items through processing, large quantities of stored products, improper distribution to distribution centers. Inventory requires more attention to allocating the right space to store products, preserving maintained goods, and fluctuations in the timely delivery of products. By holding an eye on inventory, the decision-makers can maintain a list of stock and what products are monitoring credits and remain in the warehouse. Because of the complexities of goods stored in warehouse with external technology, inventory systems must pay more attention to reduce the emission and power consumption in the processing industry. Inventory systems require accurate information about the inventory of goods to avoid the loss of inventory, creating more than profits.

In more general terms, the focus of the just-in-time philosophy is on *avoiding waste* wherever it might occur in the production process. One form of waste is unnecessary inventory. Others are unnecessarily large setup costs, unnecessarily long lead times, production facilities that are not operational when they are needed and defective items. Minimizing these forms of waste is a key component of superior inventory management.

### **3.24 Carbon emission reduction**

Carbon taxes and cap-and-trade policies are being used by governments to reduce carbon emissions. The cost of carbon dioxide emissions is the subject of carbon tax policy.

A cap-and-trade policy is a type of trade policy that imposes limitations on carbon dioxide emissions reductions. Arash Sepehri [4] developed a model for controlling carbon emissions that included a carbon cap-and-tax policy in green technologies. In terms of productivity and social welfare, Xiaoping Xu proposed grandfather-based and benchmark-based allocation methods that will result in lower carbon emissions. See Ref. [5].

#### **3.25 Block chain technology**

Nowadays, block chain technology is the backbone of many organizations. Block chain is a cloud storage network, which shares out-of-records among members in the network space in a secure way. It is accountable to all and provides strong technical support for record transactions that ensure transparency for all members within the network. Block chain technology can increase trust and security by strengthening and collaborating on shared data knowledge about inventory in a centralized network based on various authorities and responsibilities.

Because inventory involves the difficulty of accurately estimating sales levels, production schedules, demand and consumption requirements, management needs block chain technology to make inventory decisions.

Block chain can greatly improve to support right decisions, the transparency of operations in any industry that becomes the heart of business strategy. It is used to maintain inventory data with either RFID tags or electronic product cods, which are unique identifiers or digital signatures. Transaction of any inventory data is recorded on the block chain, which transferred among involving parties who have rights to see the entire data that provides a complete, trustworthy.

Block chain technology is digital technology that is a decentralized ledger for recording inventory data transactions between multiple partners. Partners can view any variation in stock through this technology such as excess inventory or low stock inventory. Loss or fraud in the recorded data can be avoided. In the Qiu-xiang Li supply chain model [6], blockchain technology is considered to have an impact on the game and market demand between members of the supply chain through information sharing.

### *Advances in Inventory Control DOI: http://dx.doi.org/10.5772/intechopen.104387*

Inventory control is an important part in logistics, which could manage the inventory by making revenue to keep continuous moving on to strengthen logistics and inventory management activities. Due to the need to retain this physical stock of goods in future usage, inventory management is one of the most important aspects of logistics supply management. The desired results and ensure measurable targets are set to drive the right decisions across the organization.
