Efficient inventory control relies on getting the right values for inventory cost parameters like holding costs and ordering/setup costs. This research looks at how these values are determined and how they affect inventory management. The study uses mathematical modeling and operations research to investigate financial risks related to inventory, such as uncertain demand and setup costs. The findings show that while stochastic demand and setup costs have little impact on optimal inventory policies, uncertain per unit replenishment costs significantly influence decision-making. By using a specific formula to calculate the capital cost of holding inventory, a good estimate of the optimal policy can be achieved.