Why should inventory be controlled? 

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pohnpei397 | College Teacher | (Level 3) Distinguished Educator

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Inventory control is important in a number of ways.  All of them are important in making sure a business runs as efficiently and profitably as possible.  Among the ways it matters are:

  • It prevents the firm from running out of things it needs.  If the firm runs out, it stops being able to produce and loses money.
  • It prevents the firm from having too much inventory.  Excess inventory takes up space and incurs storage costs.
  • It ensures that inventory is stored safely and will not be spoiled, thus leading to loss of money.
  • It ensures that the inventory is easily available to authorized personnel.  This means that time is not wasted in looking for things that are needed.  It also means that inventory cannot easily be stolen.

All of these things help ensure that a firm will operate as efficiently as possible.

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