What is Inventory Management?

Inventory management is the process of efficiently overseeing the constant flow of units into and out of an existing inventory.

Inventory management is the active control program which allows the management of sales, purchases and payments

Definition of 'Inventory

The raw materials, work-in-process goods and completely finished goods that are considered to be the portion of a business's assets that are ready or will be ready for sale.

All types of businesses will have an inventory whether for their sales or supplies. A business will surely get into trouble without an inventory An inventory management keeps one updated with how many products do they still have in stock. This lets a business know their capacity to sell. Effective inventory management also keeps one on track of the sales and the products that are sold. With the inventory management, a business owner can somehow see if they are gaining profits or not

The objectives of inventory management:-

i) To ensure that the supply of raw material & finished goods will remain continuous so that production process is not halted and demands of customers are duly met.

(ii) To minimise carrying cost of inventory.

(iii) To keep investment in inventory at optimum level.

iv) To reduce the losses of theft, obsolescence & wastage etc.

(v) To make arrangement for sale of slow moving items.

(vi) To minimise inventory ordering costs.