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Managing inventory is an essential aspect of running a successful business. Inventory costs refer to the expenses associated with purchasing, storing, and managing inventory. These include the cost of raw materials, labor, storage, transportation, and more.

Effectively managing inventory is crucial for businesses looking to maximize their profits. If a business spends less money on inventory, then more money they can allocate towards other areas of the business such as marketing, research and development, and employee compensation.

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