INVENTORY MANAGEMENT IN SERVICES

INTRODUCTION

 What is inventory management

 Inventory management refers to the process of ordering, storing, using, and selling a
company’s inventory. This includes the management of raw materials, components,
and finished products, as well as warehousing and processing of such items.
INVENTORY IN SERVICES

 In a service industry, since there is no exchange of physical stock, the inventory is

mostly intangible in nature. So the service industry inventory mostly includes the
steps involved before completing a sale.
 Example: For a research consultancy firm, inventory consists of all the information
collected for a project.
INVENTORY IN MANUFACTURING

 In a manufacturing business, inventory is not only the final product manufactured and
ready to sell, but also the raw materials used in production and the semi-finished
goods in the warehouse or on the factory floor.
SERVICE VS MANUFACTURING

1. Low setup costs

2. Perishability Characteristic
3. Information accuracy
 Inventory costs are the costs related to storing and maintaining its inventory over a
certain period of time.
 Typically, inventory costs are described on an annualized basis.