Materials Management: Inventory Valuation and Review

The adoption of efficient policies to reduce costs and obtain improvements in processes concerning inventory management presents itself as a constant challenge for supply managers, given the financial and strategic representativeness of inventories to achieve competitive advantage. Inventories can be translated as resources that generate capital costs, storage costs and risks (such as obsolescence), and when at inappropriately excessive levels, jeopardize companies' working capital. In the industry, inventory management becomes primordial not only due to the functional perspective of storage but also to ensure the maintenance of quality and customer service.