In business, the overall efficiency of the company's operation is directly related to the existing inventory situation within the company. Unfortunately, that is a sign that management does not recognized the importance of inventories. What they are lacking are an understanding of the inventory control stystem. In most companies, the inventory control system is based on their experiences without taking any mathematical approach to justify their inventory decisions. Therefore, in this study, the main purpose is to apply the concepts taht underlie good inventory management in a manufacturing factory. The study is carried out in the material department at MechMar Boiler (M) Sdn.Bhd. , Pasir Gudang, Johor. By using the ABC classification method, the materials used are classified into three classes namely class A, class B and class C based on their usage from August 1990 to July 1991. The results show that class A consists of 40 items, class B consists of 90 items while class C consists of 156 items. It also shows that most of the class A item is boiler plate and burner which are imported from Japan. The focus is then set on class A item where matehmatical approach is used to analyzed the existing system. here, a one year period is divided into four study period with three months duration for each period. With some assumptions, the average lot size, EOQ and ROP for every period is obtained. By comparing the calculated average lot size with the existing system value, it shows a drastic improvement in the range from 11.4% to 20.42%. At the final stage, by using dBASE software, a new inventory control system is designed to cope with the these objectives.