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Project Description : Every firm need inventory to ensure that its operations function smoothly. It connects the production and distribution processes. In most cases, the investment in inventories accounts for the majority of current assets/working capital. As a result, proper inventory control and management are critical. A company that ignores inventory management risks jeopardizing its long-term viability and may fail. The elimination of surplus inventories has a positive effect on the company's profitability. The financial health of the company depends on effective inventory management, as being out of stock forces clients to turn to other businesses or reduces revenues. A high amount of inventory, however, results in high carrying costs for the inventory, which include the cost of the capital invested in the inventory in the form of house fees, insurance, etc. The objective of this project is to examine the role of inventory management in cost control.
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