An inventory system is a set of procedures and records used to manage the goods and materials that a business holds for eventual sale. It consists of two primary components: physical inventory, which tracks the actual goods a business has and virtual inventory, which stores information about those goods. In addition to helping businesses track what products they have, an inventory system can also provide useful insights into a company’s operational efficiency, product availability, and future needs. Through an inventory system, businesses can easily monitor their stock levels, forecast demand, analyze sales trends, and plan orders accurately – all while optimizing the supply chain and reducing costs.