INVENTORY PLANNING AND CONTROL

The main goal of "inventory control" is to discover and maintain the optimum level of investment in all types of inventories, from raw materials and supplies to finished goods that helps to maximize long-run profits.

Two limits must be imposed in controlling inventory levels, because there are two danger points that management usually wants to ignore. Such problems are:

(i) That inadequate inventories, disrupts production and may lose sales.
(ii) That excessive inventories, introduces unnecessary carrying costs and obsolescence risks.