Advantages and Disadvantages of Inventory Management

1. Inventory management reduces costs and prevents overstocking by keeping products easily available.
2. Businesses can prevent over-purchasing, avoid waste, and lower storage costs by accurately monitoring inventory levels.
3. This process guarantees that the right products are always in stock, which reduces missed sales opportunities and increases customer satisfaction.
4.  Inventory audits help businesses identify discrepancies and maintain more reliable stock records.

Disadvantages of Inventory Management

1. Poor inventory management leads to stock shortages or excess and increases costs and missed sales.
2. When stock levels are not tracked properly, businesses may run out of key products.
3. Excess inventory also ties up capital and raises storage costs unnecessarily.
4. Lack of automation in inventory processes can slow decision-making and waste time.

Inventory management is the process of tracking, controlling, and optimizing stock levels to ensure the right products are available at the right time. Its main purpose is to prevent overstocking or shortages, reducing costs while meeting customer demands. It includes Just-in-Time (JIT), ABC Analysis, Perpetual Inventory System, and Safety Stock Management. It definitely improves cash flow, reduces storage costs, and ensures consistent product availability if properly done.