To ensure that the supply of raw material & finished goods will remain continuous so that production process is not halted and demands of customers are duly met.
(ii) To minimise carrying cost of inventory.
(iii) To keep investment in inventory at optimum level.
(iv) To reduce the losses of theft, obsolescence & wastage etc.
(v) To make arrangement for sale of slow moving items.
(vi) To minimise inventory ordering costs.