ECONOMICS

Detailed explanation-1: -Slow moving inventory can occur for different reasons, such as the introduction of new products, the start of the year, improper phasing out of previous product versions, or the end of seasons.

Detailed explanation-2: -There are four main types of inventory: raw materials/components, WIP, finished goods and MRO.

Detailed explanation-3: -Beyond having too little or too much inventory, poor inventory management causes inefficiencies because you don’t have accurate real-time information on how much inventory you have. This increases the risk of mistakes in reordering inventory from suppliers or of selling nonexistent inventory.