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