To gain economy in the purchase.

To satisfied the demand during period of replenishment.

To carry reserve stock to avoid stock out.
.

To stabilized fluctuation in consumption.

To provide reasonable level of client services.

Inventory Arrangement and Control:the inventory arrangement would mean the purchase of materials to be stored before entering the production stage or sold out, such that the stock cost is zero. There are three kinds of inventories: a) raw material, b) purchased goods, and c) finished components.

Continual and effective flow and supply of materials: The required material by all production center and other departments should be ensured for its continuity in flow and supply by the material management department

Material Quality Control: The quality of the finished products manufactured will depend upon the quality of raw material used to manufacture those products. Therefore, the purchase of right quality of materials is indeed very important. The quality of materials can be measured through proper inspection, specification, quality control, simplification and standardization.

Lower Inventories: By keeping inventories low in relation to sales, it ensures that less capital is tied up in inventories. This increases the efficiency with which the capital of the company is utilized resulting in higher return on investment. Storage and carrying costs are also lower.

Reduction in Real Cost:Efficient and economical handling of materials and storage lowers the acquisition and possession cost resulting in the reduction in the real cost

Procurement of Quality Materials:

Materials department is responsible for ensuring quality of materials from outside suppliers. Therefore, quality becomes the single most objective in procurement of materials.

Efficient handling of Materials:

The effective material control techniques help the efficient handling of materials resulting in the lowering of production cost