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MANAGEMENT OF WORKING CAPITAL
9.69
UNIT - III
MANAGEMENT OF INVENTORY
14. INVENTORY MANAGEMENT
Inventories constitute a major element of working capital. It is, therefore, important
that investment in inventory is properly controlled. The objectives of inventory
management are, to a great extent, similar to the objectives of cash management.
Inventory management covers a large number of problems including fixation of
minimum and maximum levels, determining the size of inventory to be carried,
deciding about the issues, receipts and inspection procedures, determining the
economic order quantity, proper storage facilities, keeping check over
obsolescence and ensuring control over movement of inventories.
Inventory Management has been discussed in detail in Chapter 2 (Material Cost)
Paper 4: Cost and Management Accounting. Students are advised to refer the same.
@The Institute of Chartered Accountants of India
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Oct 08, 2025
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