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The control and maintenance of inventory is a common problem in all enterprises in any sector of economy. For example, inventories must be maintained in Agriculture, Industry, Military, Retail establishment etc. There are several reasons why organizations maintain inventories. The main reason is that it is physically or economically impossible to have goods arrive in a given system precisely at the time when demands for them occur. In absence of inventories customers would have to wait until their orders were filled from a source. However customer cannot be allowed to wait for long period of time. There are several other reasons for holding inventories as well. For example, the price of some raw materials used by a manufacturer may exhibit considerable seasonal fluctuations. When the price is low, it is profitable to procure a sufficient quantity of it to last through the high priced season and to keep it in inventories to be used when need arises