1. **Problem Statement:** What is inventory? 2. **Definition:** Inventory refers to the goods and materials that a business holds for the ultimate goal of resale, production, or repair. It includes raw materials, work-in-progress, and finished goods. 3. **Explanation:** Inventory is essential for smooth production and sales operations, ensuring that there is enough stock to meet customer demand without interruption. 4. **Summary:** Inventory is the stock of items a company keeps to support production and sales activities. **Final answer:** Inventory is the stock of goods and materials held by a business to meet production and customer demand.