Inventors of an constituted major element of the total working capital and hence it has been correctly observed food inventory management is good financial management inventory management cover a large number of issues including fixation of minimum and maximum level determine the size of inventory to be carried leading about the issue price policy setting up process and inspection procedure determine the economic order quantity providing proper storage facility keeping check on excellence and setting up effective information system with regard to inventory is higher management of inventory involves two basic problem maintaining a sufficiently large size of inventory for efficient and smooth production and sale operation maintaining a minimum investment in inventory to minimise the direct indirect cost associated with holding inventory to maximize profitability inventory should neither be accessed ignore in educate is inventory is are kept at a high level highest storage and interest cost will be incurred on the other hand low level of inventory maybe resulting in underutilization of capacity and lower sales the objective of inventory management is therefore to determine and maintained the optimum level of investment in the inventory which help in achieving the following objectives ensuring the continuous supply of material to Production department facilitating an interrupted production maintaining sufficient stock of raw material in period of short supply maintaining sufficient stock of finished good for smooth sale operation minimising the carrying cost keeping investment in inventory is at the optimum level
