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<p align="justify">In the supply chain management process executives need to make effective decisions to create most efficient and responsive process. Some of the important components of inventory decisions are given as:</p>
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<h3>Cycle Inventory</h3>
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<p> The average amount of raw material or inventory kept in for the purpose of responding the demand between receipts of suppliers’ shipments is generally known as cycle inventory. The size of the inventory in the cycle inventory is a result of purchase of material in big lots, production and transportation.&#160; </p>
<p align="justify">Firms try to purchase or produce in big lots to develop economies of scale in the process of purchasing, production and transportation. Increase in lots also result in the increase of carrying costs. Taking the example of an online retailer, average sales of any retailer is nearly ten (10) truck loads per month. The decisions retailer makes in the cycle inventory are how frequently to put these orders and how greatly to order for replenishment. The e-retailer has two options whether to order one truck load every 3 days or order 10 truck loads just once in a month. The challenge supply chain executive face is the cost of ordering inventory frequently against cost of holding big lots of inventory.&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </p>
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<h3>Safety Inventory</h3>
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