Inventory Control:

You know that inventory is one of the most costly assets of mostly companies, representing as much as 40% of total invested capital. Operation managers at these firms and about the globe have long recognized that having good control over inventory is critical. On one hand, a firm tries to drop costs by decreasing on hand inventory levels. Conversely, customers become dissatisfied while an item is frequently out of stock. Therefore, companies must strike a balance between inventory investment and customer service levels. As you would expect, cost minimization is a main factor in obtaining this delicate balance.