inventory control
Quick Summary
Inventory control in business refers to the coordination and supervision of the supply, storage, distribution, and recording of materials. The goal is to maintain adequate quantities for current needs without excessive oversupply or loss.1
Inventories are any items a firm holds in stock, including finished goods, work-in-progress, raw materials, and consumables. They are listed as assets on a company's balance sheet and are crucial for determining the cost of goods sold on the income statement.2
Holding inventory incurs costs such as interest on invested capital, storage, and risks of deterioration or obsolescence. Effective inventory management is critical for a company's success, balancing the need to have items available with the costs of holding excess stock. Methods like FIFO (first-in, first-out) and LIFO (last-in, first-out) are used for pricing inventories.32
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