Inventory Management

Once material is obtained, it must be stored before it is processed, at intermediate stages in the process, and at the end of the process. These inventories are raw materials, work-in-progress, and finished goods, and represent a sizable portion of a firm's assets. Inadequately controlled, the firm loses money through excess storage and handling costs, obsolescence, pilferage, breakage, and the opportunity costs of having too much or too little inventory on hand.