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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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