Objective of Inventory Management posted by
What are the objectives of inventory management?
The main objective of inventory management is to maintain inventory at
appropriate level to avoid excessive or shortage of inventory because both the
cases are undesirable for business. Thus, management is faced with the
following conflicting objectives:
1. To keep inventory at sufficiently high level to perform production and sales
2. To minimize investment in inventory at minimum level to maximize
Other objectives of inventory management are explained as under:-
1. 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.
2. To minimize carrying cost of inventory.
3. To keep investment in inventory at optimum level.
4. To reduce the losses of theft, obsolescence & wastage etc.
5. To make arrangement for sale of slow moving items.
6. To minimize inventory ordering costs.