Inventory

tl;drAssets held for sale in the normal course of business, including raw materials, work in process, and finished goods.

Inventory represents a significant investment for many businesses and requires careful management to optimize levels and costs.

Imagine a manufacturer maintaining $2 million in raw materials, $1.5 million in work in process, and $3 million in finished goods inventory. Proper management involves balancing production needs, storage costs, and customer service levels while minimizing obsolescence risk.

Managing inventory requires understanding demand patterns, lead times, and carrying costs. Organizations must optimize order quantities while maintaining adequate stock levels.

Back to the glossary