Answer to Question #182865 in Management for Shaun

Question

Inventory is imperative to organisations. Taking into consideration that there are various categories of inventory, discuss the role and economic importance of holding inventory for a car manufacturer such as Toyota. Ensure to use practical examples to substantiate your answer.  

Answer 1

Inventory management promotes the efficient use of resources like money in an organization enabling a company to satisfy its consumer needs. Thus, in a large manufacturing company like Toyota, inventory is imperative in the company's assessment of the exact situation of its car production critical in the timely delivery of its car products. Moreover, a proper inventory system makes the business manageable by merging all data regarding raw materials, finished products and goods production. Thus, Toyota inventory enables the company to figure out what is in its warehouses and proper management of its supply chain essential for its success in the market.