 Inventory management allows a firm to maintain sufficient inventory level while avoiding to hold an undesirable or too much inventory level in the stock. Investments tied up in inventories does not produce cash until the inventory is sold or it is disposed of in some other way. Cost manufacturing concerns having substantial amount invested in inventories are now increasingly looking for much new, updated and cost efficient techniques to minimize their inventory, holding and carrying costs. What a primary goal can be to hold an amount in the inventory? Its purpose is to maintain inventory levels so that the buying and selling can take place without concentrating unnecessary amount of money in the inventory. There are two types of motives while maintaining an inventory level. The first is the transaction motive where the inventory is needed in order to meet the routine production and sales business cycle. The second motive is the precautionary motive where the inventory is desired to avoid any stock out losses. As we know that the amount of investment in inventories may go up to a certain substantial level so there are certain implications of this investment in the inventories. There may be a chance that the over investment in inventories can sequence liquidity position of the firm. On contrary, under investment in inventories by the firm can result in loss of customers from long delays in delivery of goods. If we talk about inventory management approaches, the first we have economic order quantity or EOQ, it is a famous quantitative model that allows a firm to determine its inventory level at which the new inventory can be ordered. This EOQ equates the firm's ordinary cost with the carrying cost of the inventory and interestingly at EOQ level the total cost of the inventory goes on minimize level. We have an other approach in terms of safety stock. This is the level of extra stock that is maintained by the firm in order to mitigate riskiness of the stock outcast by some uncertainties in the market. The other approach we have is the just-in-time method or the JIT method. It is a system that aligns the new material orders from suppliers directly with the production schedule so it aligns the production schedules with the inventory orders. Here materials are ordered at a point at which current stock reaches at a reorder point. Or we can say that JIT allows a firm to demand inventory when it is required. Certain types of inventory costs that a firm can bear. The first is the ordering cost, it is the procurement or replenishment cost and this ordering cost can be in terms of fixed cost and the variable cost as well. The example may include freight, handling and machine setup cost. Carrying cost refers to the financing and holding cost and these costs are basically subject to the average inventory level or the average amount invested in the inventory across a certain time period. The example includes storage, interest and insurance cost. Then we have stockout cost that is the opportunity or real cost affected by the inventory level and the processing time versus the terms of sales. The example of stockout cost includes lost sales and backorder cost. Then we have the policy costs which means data gathering and general operating cost that cost may be real cost or the soft cost. The example of policy costs include data processing and labor cost etc. To evaluate inventory management practices we have two measures. The first measure is the inventory turnover and the second is the inventory turnover in days. Inventory turnover is a rough measure but it is simple to compute and it can be easily compared with the other standards of inventory management. This ratio may vary among industries even it may vary among companies within the same industry due to the product mix offered by competing firm in a similar industry. The interpretation of these two ratios can be different so we have various versions of these interpretations because of the reason there a decrease in inventory turnover mean the first more inventory is on hand and it is not moving through sales or there is a change in the firm's product mix or the firm is reducing its risk of stockout. So due to these reasons we may have different versions of interpretations of the two inventory measuring ratios.