This project work has been carried out for investigating the existing Inventory Management system of the Eastern jute Mills Limited,Khulna, Bangladesh. Eastern Jute Mills Limited manufactures jute products such as hessian, sacks, and jute carpet backing clothes. Itwas founded in 1967 and is based in Khulna, Bangladesh. It also operates as a subsidiary of Bangladesh Jute Mills Corporation. Forinvestigating the Inventory related data and information, the necessary data has been collected from this Jute Mill. By close look of thepresent inventory management system and discussing with the executive personals of the Eastern Jute Mills Limited, Khulna, A clearconception of the existing Inventory Management system has been gained. ABC analysis has been carried out for annual demand. RawJute purchasing procedure has been examined and storing procedure has been observed by close observation to find out the majordrawback of the existing inventory management system. Finally it has been focused to suggest an improved Inventory Managementsystem for the Eastern Jute Mills Limited, Khulna.