Inventory

Inventory refers to goods or materials that a company holds for the purpose of resale or production.

Companies want to hold inventory to ensure they have sufficient goods and materials to meet customer demands without delays.

Low inventory is desirable as it reduces storage costs, minimises the risk of obsolescence, and frees up cash for other purposes. It usually indicates efficient supply chain management.

Apple has low inventory because they famously operate with it in the interest of keeping supply chain management very efficient, with high product demand, and maintaining product value by minimising the risk of products becoming obsolete before they are sold.

A retailer, conversely, would want high inventory because they have to produce a large quantity and variety of clothing to cater to a wide customer base. A high inventory is also needed for clothing retailers because they have to view the items before purchasing them - product availability, meeting customer demands immediately. This also allows them to prepare for seasonal demand spikes.

Digital service platforms like Facebook has next to no inventory as their primary products are digital services and platforms. As this doesn't require physical storage, they have virtually no inventory.