Inventory management, a component of supply chain management, is to supervise the flow of goods from manufacturers to warehouses until the point of sale. The key function of inventory management is to determine the inputs, facilitate production, optimizing the sales, and thereby minimizing the costs. In short, it is keeping a detailed record of each and every inventory when it enters or leaves a warehouse or point of sale. An inventory can be any item that a business holds. It is an array of items such as property, goods in stock (finished or production), or the contents of a building.
Objectives of inventory management system:
• Keep the investment in inventory at optimum level
• Smooth fulfilment of orders
•Analyze product sales patterns
•Minimize investment in inventory and maximize profitability
•Know when to scale or shrink the production of goods
•Reduce losses due to theft, wastage, etc.
•Ensure that the supply of raw material and finished goods will remain continuous