Inventory is the stock of goods for the purpose of Future use or sales. It is maintained for operational smoothness & act as a cushion between supply & Demand. There are different types of inventory like Production inventory, MRO ( maintenance, Repair, Operation ) Inventory, In-Process Inventory & Finished goods Inventory.
Do ABC Analysis for annual consumption value of Items. HML analysis for cost of materials, High, Medium & Low. Next comes VED ( Vital, Essential & Desirable). Take all above factors into consideration and fix Minimum Stock, Safety Stock, Maximum Stock, Re-order quantity & Re-order level for each item in the inventory list.
