摘要：Many firms/industries,whether manufacturing or purchasing,face great cha llenges in managing inventories. Poor inventory management may result in under-stocking, overstocking as well a s high inventory total cost.This paper examines inventory situation at Urafiki Textile Mills Co Ltd in Dar-es-Salaam, Tanzania.The objective of this paper isto develop the Economic Order Quantity (EOQ) model that will be used to determine number of units of an item to order at a time and the re-order point (r), that is the level to which stocks of itemsare allowed to fall before ordering other items,for raw materials. The resulting EOQ for each raw material iscompared to the actual ordered quantitiesso asto see whether there isanyrelationship between themin operational cost reduction. The study used cross section secondary data from Urafiki.The comparisonof operational cost reductionwas done by using normal distributiontest.Excel was used to find EOQand the re-order point. The results show that the relationship between the EOQs and the ordered quantitiesatUrafiki in terms of operational cost reduction was significant.Therefore,it was concluded that the ordered quantities at Urafiki Textile Mills were not optimal. Therefore, it is recommended thatin order to manage inventory effectively, Urafikineedsto employ inventory control methods such asthe EOQ model to obtainreasonable ordered quantities for its raw materials.The inventory level to be maintained isgiven in the text
