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Management of inventory

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Why is proper management of inventory critical to operating efficiency? Why do the goals of inventory management appear to be contradictory? What is the overall goal of inventory management?

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INVENTORY is defined as the blocked Working Capital of an organization in the form of materials. Inventory is defined as store of goods. As this is the blocked Working Capital of organization, ideally it should be zero. But we are maintaining Inventory . This Inventory is maintained to take care of fluctuations in demand and lead time. In some cases it is maintained to take care of increasing price tendency of commodities or rebate in bulk buying.
(Purpose of Inventory Management n.d.)

Why is proper management of inventory critical to operating efficiency?

Inventories are healthy if they are in right quantity at right time. It's crucial to have proper management of inventory for managing the ...

Solution Summary

The response discusses the management of inventory.

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