What is Inventory Management?

Inventory management is the systematic process of ordering, storing, using, and selling a company's inventory. This includes the management of raw materials, components, and finished products, as well as warehousing and processing of such items. Businesses use inventory management to maintain optimal inventory levels, track inventory movement, reduce costs, and fulfill customer orders efficiently. Common techniques include ABC analysis, just-in-time (JIT) inventory, economic order quantity (EOQ), and cycle counting. Inventory management systems are often software-based and integrate with other business systems like sales, purchasing, and accounting.