Chapter 7
Inventory: Merchandising Transactions
193
Inventory Objectives
All aspects of a business should be guided by the objectives set by management. This not only
allows for the accomplishment of specific objectives, but allows all organizational objectives to be
properly coordinated. For example, sales objectives can be tied to inventory objectives; and profit
objectives can be tied to those set by the marketing department.
All employees should be aware of stated objectives. For example, if a company wishes to keep items
in inventory for only a short period of time before being shipped out, then both the receiver and
shipper should be aware of this. This objective would guide much of their short-term and long-
term activities.
Meeting inventory objectives must be a total team effort. If inventory levels are not maintained
close to management’s objective, then initiatives should be implemented to ensure that objectives
are reassessed or changed. For example, if inventory levels are higher than expected, the sales
department can view it as a challenge to get items moving out faster.The more sales increase, the
less inventory builds up in the warehouse.
