With inventory representing a very large percentage of assets, how does one control costs?
a. Cost controls can be found through an inventory management system. Improved controls over demand, processes, supply, lead time and cost variances are some components.
b. Keeping the customer satisfied helps keep them loyal, insuring inventory will turn as negotiated.
c. The key to reducing inventory costs is to increasingly involve suppliers and vendors in carrying components for additional periods of time, thus lowering carrying costs.