Inventory Management Optimization as Part of Operational Risk Management

Abstract

The basic financial purpose of an enterprise is maximization of its value. Inventory management should also contribute to realization of this fundamental aim. The enterprise value maximization strategy is executed with a focus on risk and uncertainty. This article presents the consequences for the recipients firm that can result from operating risk that is related to delivery risk generated by the suppliers. The present article offers a method that uses portfolio management theory to chose the suppliers.