In the course of studying production and inventory control, the author of this paper found it repeatedly necessary to explain his mathematical theory to operating personnel, many of whom have had little or no formal training in mathematics at the college level. This paper, then, is an outgrowth of these presentations and has a twofold purpose: (1) to present a theory of a very small part of the problem of production and inventory control with the objective of acquainting the reader with the nature of the mathematical methodology, (2) to lay emphasis on a didactic presentation to show the principles involved in explaining these mathematical concepts.