Obviously, inventory holding costs money but is not always a disadvantage, because inventories do have
benefits as well. Hence, when interpreting financial performance as a function of inventory, the notion
‘lesser inventory is better’ cannot be maintained. Instead the classic view of operations research, seeking for
optimum lot sizes and inventory levels, regarding inventory as a costly but necessary buffer to smooth production
levels (e.g. Silver 1981, Silver et al. 1998), seems to regain ground. With respect to this operations research view
the following distinction might be helpful: inventory (in monetary units) as a component of cost of capital ought to
be minimised in an optimisation calculus, while sufficient stock (in quantity units) has to be considered as a
constraint.