ACTIVE INVENTORY Meaning and
Definition
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Active inventory refers to the current stock or supply of goods, products, or assets that are readily available for sale, distribution, or use within a business or organization. It represents the tangible items that are currently being utilized or involved in the ongoing operations of the entity.
Active inventory is essentially the portion of inventory that is actively being managed and controlled by the business to meet customer demands or operational requirements. It includes those items that are regularly bought, sold, or used by the business and are a part of its core operations.
Active inventory can consist of a wide range of physical items, ranging from raw materials and components to finished goods or products. In retail businesses, it includes merchandise that is displayed on shelves and available for purchase. It can also include tools, machinery, or equipment that are essential for the functioning of a manufacturing or production facility.
The status of an item as active inventory implies that it is not obsolete, expired, damaged, or otherwise unsuitable for use or sale. Active inventory is typically tracked and monitored closely by the business to ensure accurate inventory management, optimize supply chain activities, and maintain efficient stock levels.
The efficient management of active inventory is crucial for businesses as it can impact factors such as customer satisfaction, sales revenue, operational efficiency, and profitability. Effective inventory control systems are often implemented to ensure that active inventory levels are accurately maintained, replenished when needed, and aligned with customer demand.
Etymology of ACTIVE INVENTORY
The word "active" derives from the Latin word "activus", which means "doing, going, or acting". It entered English in the late 14th century, originally referring to the state of being active or engaging in vigorous action.
The term "inventory" comes from the Latin word "inventarium", which means "a list of items" or "a statement of goods". It can be traced back to the Latin verb "invenire", meaning "to find".
When combined, the phrase "active inventory" refers to a constantly updated list or record of items, goods, or products that are currently in use, available for sale, or readily accessible.
