Inventory management in operations research focuses on determining optimal policies that balance various costs associated with holding and replenishing stock. Among these, inventory ordering costs, carrying costs, and stock out costs are the most fundamental. Understanding what constitutes each cost and how they behave in relation to one another is essential for designing effective inventory control models such as the Economic Order Quantity and its extensions. Inventory ordering costs are the costs incurred every time an order for replenishment is placed, regardless of the size of the order. These costs include administrative expenses related to preparing and processing purchase orders, clerical work, documentation, approvals, and communication with suppliers. They also cover costs of supplier selection, negotiation, invoicing, inspection of incoming materials, and follow-up activities. In many cases, ordering costs also include transportation and handling costs that are fixed per order rather than per unit. For a manufacturing organization, ordering costs may involve setup costs associated with changing over machinery or production lines to produce a different item, including labor time, machine idle time, and trial runs. A key characteristic of ordering cost is that it is generally assumed to be fixed per order and independent of the quantity ordered, which makes it inversely related to order size when expressed on an annual basis. Inventory carrying costs, also known as holding costs, represent the cost of maintaining inventory over a period of time. These costs arise because inventory ties up organizational resources and requires physical space and protection. Carrying costs typically include capital costs, which are the opportunity costs of funds invested in inventory that could have been used elsewhere. They also include storage costs such as warehousing rent, utilities, handling equipment, and labor. Other important components are insurance costs, taxes, depreciation, deterioration, obsolescence, and losses due to theft, damage, or spoilage. In addition, for certain items, carrying costs