1 Inventory Management at Bama Drinks Company: Four Progressive Cases Benjamin Neve, The University of Alabama Marco Lam, York College of Pennsylvania Roger J. Gagnon, North Carolina A&T State University ABSTRACT Utilizing cases with real or believable scenarios can be very useful for capturing student attention for instructing the concepts and models of inventory management. We have developed four integrated cases for such instruction. The cases are connected by employing the same company and management cast throughout. The topics progress from introductory inventory concepts, costs, and ordering policies to trend, seasonality, and forecasting issues and conclude with differentiated customer service level policies. Extensive teaching notes, graphs, and tables are available from the authors. Excel files for the forecasting methodologies are also available upon request. INTRODUCTION When instructing inventory management concepts it is fruitful if the instructor and pedagogy allow a linkage between the inventory topics – progressing from the introductory to the more advanced. Such is the purpose of the Bama Drinks Company portfolio of cases. The cases evolve from an introductory discussion of inventory concepts and associated costs set in the believable setting of a southern soft drinks distributor (Case A). In this case students are exposed to the realism of managing inventory shortages and their associated costs. A number of Bama functional managers are introduced and their mention is continued throughout the case portfolio. Case (B) provides specific cost details (e.g., leasing, freight, order placement, and holding costs) and requires the students develop inventory ordering policies (economic order quantity and reorder point). It also asks the students to determine the needed inventory storage space based on the inventory policies. Case (C) builds on the techniques utilized in Case (B) by adding the realistic complexities of predicting future sales when a trend and seasonality are present. This is essential to overcome since inventory policies are based on future, rather than historic, sales patterns. The more accurate the sales forecast, the more realistic the inventory policies can be. It also gives the students the opportunity to explore different sales forecasts using numerous mathematical formulations. Thus, the students learn the linkage between forecasting and inventory decisions and the reality that an accurate forecast must precede. Finally, Case (D) explores the realistic situation of having different service levels for various customers. Prioritizing customers is necessary for they do not all represent the same economic benefit to the company. The trade-offs necessary when designing such inventory policies are explored.