Objectives of Inventory Control

As inventory is an essential part of any organisation, it consists of many items running into thousands. Systematic management and control of inventory for all the items is a 

challenging job. Main objectives of inventory control are as follows : 

• to maintain the overall investment in inventory at the lowest level, consistent with operating requirements, 
• to supply the product, raw material, sub-assemblies, semi-finished goods, etc. to its users as per their requirements at right time and at right price, 
• to keep inactive, waste, surplus, scrap and obsolete items at the minimum level, 
• to minimise holding, replacement and shortage costs of inventories and maximise the efficiency in production and distribution, and 
• to reduce the risk inherent in treating inventory as an investment which is risky. For some items, investment may lead to higher returns and for others less returns. 

Generally, the inventory and stock are regarded as synonymous. However, its original meaning is t&e list of stocked items. Such stock normally consists of following : 

1. direct items which is included in the finished product, 
2. indirect items which is not included in the finished product like cleaning materials, stationery, etc. 
3. supporting items directly supporting production like spares for the emergency generator, and 
4. reserved items which are committed to some specific purpose but need not be kept separate from other.