What is the main goal of inventory management?

The primary goal of inventory management is to maintain optimal inventory levels to meet customer demands while minimizing costs. This approach ensures that an organization has the right amount of stock on hand to fulfill customer orders without incurring excess costs related to overstocking or stockouts. Effective inventory management balances supply and demand, thus enhancing customer satisfaction through timely deliveries and helping organizations manage their expenses efficiently.

This focus on optimal inventory levels means that businesses can reduce holding costs and avoid issues that arise from having too much or too little inventory, such as waste from perishable goods or lost sales due to stockouts. By aligning inventory levels with actual customer demand, companies can operate more efficiently and remain competitive in the marketplace.