what is inventory management?
please give references of articles
- 1 decade agoFavorite Answer
inventory management involves trying to hold in stock enough product to meet demand but not excessive amounts-why?
Policies, procedures, and techniques employed in maintaining the optimum number or amount of each inventory item. The objective of inventory management is to provide uninterrupted production, sales, and/or customer-service levels at the minimum cost. Since, for many firms, inventory is the largest item in the current assets category, inventory problems can and do contribute to losses or even business failures. Also called inventory control. See also inventory analysis.
inventory costs money-manufacturers want to have a smooth production cycle-make only what you can sell
retail and wholesale businesses rely heavily on moving product quickly-performance is measured by sales per square foot, and product lying around not moving affects their profit by taking up valueable space. the faster product moves the more profitable these businesses are.
since the product is paid for,excess inventory ties up cash with no return-it's like a company putting their money in a mattress-instead of being used to purchase goods, invest, or pay debt, it's just sitting there doing nothing.
excess inventory also increases the risk that product won't sell and will have to be heavily discounted or returned to mfg, which is a losing deal for mfgs. and resellers.Source(s): definition from businessdictionary.com
- 4 years ago
Inventory management is the overseeing and controlling of the ordering, storage and use of components that a company will use in the production of the items it will sell as well as the overseeing and controlling of quantities of finished products for sale.
- jeff410Lv 71 decade ago
Maximizing the level of inventory to meet demand while minimizing the costs of obtaining and holding inventory, such as insurance, storage and transportation costs.
- Anonymous1 decade ago