Inventory form a link between production and sale of a product. For most companies inventories are very important investments, often dominating fixed asset investments. With the concern for return onassets expressed by many companies in recent years, there has come ever-increasing focus on the funds committed to receivables and inventories. Whether these current assets are managed efficiently, influences very strongly the amount of funds invested. The stocking of anything that is tangible in order to meet future demand is the subject of inventory theory. In production management and in any type of operations management, the term ‘inventory’ generally refers to ‘materials in stock’. The materials inventory in operation is maintained, typically for the purposes of transaction, precaution and speculation. An inventory is the stock of idle resources in a firm for future use. In an organization, inventories can be of various types. Manufacturing organization, typically have inventories of raw materials, components, sub-assemblies (e.g. the headlight assembly for cars at Maruti Udyog Ltd. is supplied by Lucas-TVS Ltd.), tools and equipments, semi finished goods, finished goods etc. In service organizations, such as banks, financial institutions, hospitals etc., the inventory consists of various items to be used in various service operations. In a manufacturing unit usually about 20 to 30 % of total assets are in the form of inventory and effort in stock control will bring major benefits for the enterprise. Today the efficiency and state of industrialization of a country is known by the method of inventory management because poor or mismanagement of inventory is harmful not only to the industry, but to the country as a whole as it effects the economic, social and political environment of the country. In this paper "Research Methodology and Literature Review on Inventory Management in FMCG Companies" has been discussed.