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VOL. 8, ISSUE 3 (2026)
Role of inventory management in working capital optimization
Authors
Dr. Bijay Kumar Mishra
Abstract
Inventory management plays a critical role in the financial and
operational performance of an organization. Efficient inventory management
directly influences working capital optimization by balancing inventory levels,
reducing carrying costs, and improving liquidity. Working capital represents
the short-term financial health of a business, and inventory constitutes a
major component of current assets in manufacturing and trading organizations.
This research paper examines the relationship between inventory management and
working capital optimization, highlighting various inventory control
techniques, challenges, and strategic approaches adopted by firms to enhance
profitability and operational efficiency. The study concludes that effective
inventory management contributes significantly to reducing unnecessary capital
blockage, improving cash flow, and enhancing overall organizational
performance.
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Pages:16-22
How to cite this article:
Dr. Bijay Kumar Mishra "Role of inventory management in working capital optimization". International Journal of Finance and Commerce, Vol 8, Issue 3, 2026, Pages 16-22
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