Explain Inventory Procurement Cost and Inventory Carrying Cost.

Inventory Procurement Cost and Inventory Carrying Cost: Inventory is a detailed list of such movable items which are essential to manufacture a product and to keep the equipment and machinery in good working order. Inventory control is related with achieving an optimum balance among two competing objectives: -

• To minimize investment in inventory.
• To maximize facility levels to the firm's customers and its own operating departments.
• A problem that always remains is that how much material may be ordered at a time. It is termed as Economic Order Quantity (EOQ).