Inventory

What Is Inventory?
Inventory or stock (in common terms) is considered to be the
central theme in managing materials.

The inventory turnover ratio (ITR) is a barometer of performance

of materials management function.

In the generally understood term, inventory means a physical

stock of goods kept in store to meet the anticipated demand.

However, from materials management perspective, an apt

definition ofinventory is a usable but idle resource having some
economic value.
Why Do We Need Inventories?
1. Time lag between placing orders and getting
supplies at the point of consumption
2. Variability of lead times
3. Demand variability
4. Seasonal inventory
5. Pipeline inventory