This article focuses on need of Inventory Management, their importance in organization to manage resources and smooth flow of production to fulfill demand. We have tried to cover all points necessary to elaborate need of inventory with suitable examples.

To meet variation in product demand

To maintain independence operations

To allow flexibility in production scheduling

To manage raw material level for variation in delivery time

To take advantage of Economies of Scale & economic purchase order size

Reduce Transit Cost and Transit Times

To protect against demand and lead time uncertainties

To hedge against price increase

To take advantage of quantity discounts

To improve Customer Service

Inventory as a buffer

Cater to Cyclical and Seasonal Demand