Business,Business plan,Marketing in Business

Inventory management is another important decision area in physical distribution . Inventory management is concerned with developing a system of maintaining an adequate level of product assortments to meet the customers demand.

Inventory planning is highly essential as shortages of products normally result in customer disappointments , and hence a lower level of customer servicing. Overstocking of inventories normally result in higher costs in capital tie-up , increased cost of warehousing and insurance, product decays and obsolescence costs. The increased costs result in a lower profitability . therefore , inventory management seeks to achieve a delicate balance between a shortage of inventory's and excess stock . Inventory managers deal with issues, such as when to reorder and in what quantity to reorder. So inventory management play a big role to reach the business goal . So inventory management is importance for business.