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Project Description : Every enterprise needs inventory for smooth running of its activities. Inventory serves as a link between production and distribution processes. There is, generally a time lag between the recognition of a need and its fulfillment. The greater the time lag, the higher the requirements for inventory. The unforeseen fluctuations in demand and supply of goods also necessitate the need for inventory. Simply inventory means, the value of a firm’s current assets including raw materials and work in progress and finished goods. Inventories constitutes the most significant part of current assets of a large majority of companies in India. On an average, inventories are approximately 60 percent of current assets in public limited companies in India. Because of the large size of inventories maintained by firms a considerable amount of funds are required to be committed to them. It is therefore, absolutely imperative to manage inventories efficiently and effectively in order to avoid unnecessary investment.
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