Inventory is store of goods and stocks. Items in inventories are called stock-keeping items held at stock piont. In manufacturing organization, inventory refers raw materials, parts and components, supplies, work-in process and finished goods. In service organizations, it includes the tangible items to be sold and used for day-to-day operations.
Inventories play vital role on the success of the organization. Inventory means not only maintaining stock, it refers the investment of the organizations as well as of the country. It is a major part of investment and affects the economy of the country as well. Therefore, inventory control is very essential. There should be a good inventory policy and controls. The set of policies and controls refer the inventory system of the organization.
Production and operations management focuses on conversion process of inputs into output of goods and services. It tries to maintain optimum inventory level at each stock point to ensure smooth flow of production, to meet demand of the customers at optimum cost.
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