Associate professor, Dept Of MBA, Bharath University, Chennai – 600073, India
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The management and control of inventory is a problem common to all organizations in any sector of the economy. The wealth of shareholders also lies in the warehouse. More than 60% of working capital is normally being invested in the inventory. There can be disadvantages in holding either too much or too little inventory. Therefore inventory management is primarily concerned with obtaining correct balance between two extremes. Inventory management involves the development and administration of policies, system and procedures which will minimizes total cost relative to inventory decisions and related functions such as customer service requirement, production scheduling, purchasing etc.., Viewed in that perspective, inventory management has a broad scope and affects a great or number of activities in an Organization. For the past few years the concept of inventory system has gained more importance in our country. It is due to intense competition in the market, which has forced organizations to search for proper inventory control technique to reduce investment in inventories and thereby reducing overall cost.