Inventory in business is defined as the goods and materials that a company holds for sale in the ordinary course of its operations, or those that it uses in production. It consists of raw materials, products that are in-process, and finished goods awaiting sale. Inventory is an important asset to businesses, as it allows them to ensure they’ll be able to fulfill customer orders while minimizing high carrying costs. Managing inventory properly is essential to maintain successful operations and to avoid stock-outs that can lead to lost sales.