The process of ordering, storing, using, and selling a company's inventory is referred to as inventory management. This covers the storage and processing of such commodities as well as the management of raw materials, components, and completed goods.
One of a company's most significant assets is its inventory. An organization's raw materials and finished goods are the heart of its operations in industries with high inventories including retail, manufacturing, food services, and others. When and where inventory is needed, a shortfall can be very harmful.
In addition, inventory can be seen as a liability (if not in an accounting sense). The danger of spoilage, theft, damage, or changes in demand is higher when there is a large inventory. Inventory must be insured, and if it is not sold in a timely manner, it may need to be destroyed or sold at a discount.
