Abstract

Inventory management remains a critical challenge in Fast-Moving Consumer Goods (FMCG) distribution, where minimizing both shortages and overstocking is vital to operational efficiency and customer satisfaction. Balancing inventory levels requires sophisticated optimization models that consider demand variability, lead times, and supply chain constraints. This paper presents a comprehensive review and conceptual development of an inventory optimization model tailored for FMCG distribution systems. Drawing on over 90 scholarly articles from supply chain management, operations research, and industrial engineering, this literature-based study synthesizes best practices and theoretical insights into a novel, adaptive model framework. The model aims to support distributors in achieving optimal inventory levels that reduce stockouts and excess holding costs. The paper is structured into five main sections: introduction, literature review, model development, discussion, and recommendations. This work provides valuable guidance for supply chain practitioners and researchers seeking to enhance inventory performance in FMCG markets.