The primary purpose of inventory management is to ensure that there are enough goods or materials to meet demand without creating excess stock or excess inventory. The primary purpose of inventory management is to help companies easily and efficiently manage orders, storage and inventory use. By managing your inventory effectively, you'll always know what items are in stock, how many of them are in stock, and where they are located. 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 the storage and processing of such items. The main benefit of inventory management is resource efficiency. The purpose of inventory control is to prevent the accumulation of unused dead stock. Doing so can help prevent the company from wasting its resources and space.
The primary function of an inventory system is to keep track of your products and supplies. An effective system keeps track of when you bought inventory, when you sold it, and how much you have on hand. It also tells you the location of your inventory. This can be especially important if you're using your inventory across multiple departments.
For example, a rubber supply can go through production, go to shipment, and end up in a warehouse in a remote location. An effective system allows you to track the way inventory moves in your company. Inventory management is the oversight of uncapitalized assets (or inventory) and items in stock. As a component of supply chain management, inventory management oversees the flow of products from manufacturers to warehouses and from these facilities to the point of sale.
A key function of inventory management is to maintain a detailed record of each new or returned product when it enters or leaves a warehouse or point of sale. The SEC requires public companies to disclose the LIFO reserve, which can make inventories with a LIFO cost comparable to FIFO costs. Companies often maintain sophisticated inventory management systems capable of tracking inventory levels in real time.