The objective of the logistics management is to guarantee the stock level required for the adequate handling of production at the lowest possible level of costs and risks. The main purpose of the paper is to present the relations between stock level and risk of shortages. As a result of the research, the introduction of the safety stock is the solution to cover the effects of the uncertain factors in the supply chain. The theoretical approach of the model assumes a deterministic operational environment, in practice, however, there are several unpredictable factors influencing the operation of the production company. By using the periodic and continuous review models, the paper presents the effects of demand changes and stochastic length of replenishment time on the risk of stock availability. We need to quantify a service level which determines the accepted probability of the shortage occurrence.

A B S T R A C TThe main purpose of the paper is to present the relations between the different cost factors of the inventory management systems, and the context between the order quantities and the cost level. The theoretical approach of the model assumes a deterministic operational environment with planned shortages. We make the examination of the contexts by applying the ceteris paribus principle; we change only one cost factor from among the initial conditions at once and examine its effect on the cost level. By using the economic order quantity with the planned shortage model, we can define the optimal order quantity, along which our stock management can be guaranteed by the most favourable cost level. The optimisation of the inventory level and the inventory management expenses together means an important factor in the competitiveness of the company. During the definition of the optimal inventory level of purchased parts, the purchasing and stock holding costs, and also the consequence of shortages play an important role. The presentation of the specific expense factors in each other's function, and the representation of the onetime order expenses show their proportion compared to each other and the effect of their change on the total cost, and define the opportunities of the optimisation. The significance of the model is that it represents the level line of costs, the movement of the different cost factors in relation to others and their operating mechanism. Thus, it facilitates the representation of costs and the definition of the direction of optimisation. K E Y W O R D S cost factor, optimum, order quantity, purchasing, shortage, stock holding

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When the future customer demands can be exactly quantified, the level of the closing stock, the quantity of the placed order and the actual date of the order can be clearly defined with the knowledge of the initial stocks, the production demand and the restocking of supplies. However, this initial condition is very rare in practice. There are several unpredictable factors influencing the stock level that will affect the operation of the production company. The objective of the logistics management is to guarantee the stock level required for the adequate handling of production at the lowest possible level of costs. The definition of the service level provides an opportunity to handle the fluctuation of demands due to different impacts with a predetermined safety, and to quantify the stock level required for the operation.

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