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