Inventory management helps companies identify which and how much stock to order at what time. It tracks inventory from the time of purchase to the sale of the item. The practice identifies and responds to trends to ensure there’s always enough stock to fulfill customer wants and needs and also alert retailers risk of shortage.
Once sold, inventory becomes revenue. 

Before it sells, inventory (although reported as an asset on the balance sheet) ties up cash. 
Therefore, too much stock costs money and reduces cash flow.
One measurement of good inventory management is inventory turnover. An accounting measurement, inventory turnover reflects how often stock is sold in a period. A business does not want more stock than sales. Poor inventory turnover can lead to deadstock, or unsold stock.