As per Wikipedia, inventory consists of the goods and materials held available in stock by a business. Inventory Management is the process of managing inventory in an effort to insure that a business has the goods and materials available when it needs them, but does stock the goods and materials it does not need, or stock materials too far in advance of the actual need due to the associated cost with warehousing the materials.
Advanced inventory management, also referred to as inventory optimization, is becoming more common as companies look to lean their operations and supply chains. These strategies include Just-in-Time inventory management, Vendor Managed Inventory, advanced forecasting, and even donating excess inventory. The reality is that inventory, whose carrying cost can often exceed 30% of the product value, is expensive, and better management can greatly reduce the overhead costs, as well as the depreciation losses associated with holding too much inventory.
For additional information on inventory management and inventory reduction strategies, refer to the following posts: