Due to increasing globalization, growing competition, and constant crises, the current business landscape is compelled to make savings in all areas. Significant cost reduction potentials can be found in efficient inventory management. In many companies, the primary issue is a low turnover rate of many items, leading to unnecessary stock levels. These inventories result in high capital costs and reduce the company's liquidity. What factors are decisive for a low turnover rate? Which solutions lead to an improvement in turnover rates and consequently to inventory optimization? The author provides an introductory overview of inventory management to answer these questions. Furthermore, the approaches for optimization are discussed. To illustrate this, a practical approach to inventory analysis and optimization is presented, based on a company specializing in the development and manufacturing of light-emitting diodes.