Having stock is easy; having the right stock is harder. Inventory management is the set of policies and processes that determine what to hold, how much, and where, so that demand can be met at acceptable cost.

Techniques include reorder points, economic order quantities, ABC classification, and safety-stock calculations. Systems track receipts, issues, and adjustments in real time. Reviews compare actual performance against service and cost targets.

Overstock consumes cash; understock loses sales. Good inventory management continuously balances those risks using demand signals, lead-time data, and supplier reliability information. It is less about warehouses full of product and more about disciplined decision rules.

• Policies and processes for stock levels and locations
• Uses reorder points, classification, and safety stock
• Balances service against holding cost
• Depends on accurate data and regular review