•Inventory is a detailed list of thosemovable items which are necessaryto manufacture a product and tomaintain the equipment andmachinery in god working order .The qty and value of every item isalso mentioned in the list.
1.Inventory serves as cushions toabsorb shocks.2.Inventories are necessary evil:- Ascost of not having inventories areusually greater than the costs of having them.3.Mktg, prod’n, finance andpurchasing decisions directlyinfluence the level of inventory.4.Inventory provides prod’neconomies i.e. discounts on bulk
Importance of InventoryImportance of Inventory
1.Provides and maintains good customerservice.2.Enables smooth flow of goods through theprod’n process.3.Provides protection against theuncertainties of demand and supply.4.Various prod’n operations can be performedeconomically and independently.5.Ensures a reasonable utilization of equipment and labour.6.With purchases in bulk discount can beavailed.