Question

1."The key to successful business operations is effective inventory management." Do you agree? Explain.

Answer 1

Agree, The key to successful business operations is effective inventory management.

The management of the company always try to maintain the stock of goods that are frequently demanded by the customer. If a good is in excess quantity and which are less demanded the management of the company tries to avoid the cost of carrying such inventories.

Effective inventory management aims at reducing costs i.e. cost of raw material , Finished goods. As the finished goods is the most crucial thing of the company and the success and fiailure of the company depends on it.

If there is a shortage of the inventory when it is needed then it can affect the company financially (i.e. monetary terms) and non financially ( i.e. non monetary terms like goodwiil).

From the above discussion it can be concluded that management of inventory is very useful for the business of any size and any nature. Generally the company's use ERP software to keep a track on the inventory.

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