To discourage producing for inventory, management can ________.
A) discourage using nonfinancial measures such as units in ending inventory compared to units in sales
B) evaluate performance over a quarterly period rather than a single year
C) incorporate a carrying charge for inventory in the internal accounting system
D) implement absorption costing across all departments

This is simply known as the stock of items that is kept aside by an organization to meet internal or external customer demand. It type s includes: Raw Material, work in progress (WIP), maintenance/repair/operating supply (MRO), finished good etc.

The reasons organizations holds Inventory includes

1. Meet anticipated customer demand

2. To protect against stockouts

3. Take advantage of economic order cycles

4. Maintain independence of operations

5. Guard against price increases, etc.

The objective of inventory control is to handle overstocking or Understocking and also a major challenge is to maintain a good balance between inventory investment and customer service.