Inventory is listed as an asset on a firm's balance sheet and consists of the stocks or items needed to maintain production, support activities such as maintenance and repair, and provide customer service. Inventory typically is categorized based on its flow through the production cycle, using such designations as raw materials, work in process, and finished goods. Maintenance, repair, and operating supplies also are stocked to support the functionality of the firm.

  For planning and forecasting purposes, inventory is classified based on the source of its demand as either independent or dependent. Independent demand items are requested directly by the customer and thus must be forecasted. Demand for dependent items can be derived or calculated based on relationships to independent items, usually noted by higher levels in the bill of material.

Reference - Inventory (APICS OMBOK Framework 5.2).

  Variance is the difference between what is expected and what is actually happening.  In statistics variance is a measurement of dispersion of data.

Reference:  Apics Dictionary, 2015.

Discussion
* What are some examples of variance that you see each day?

  The current state is the as is, or present circumstances.  When looking at the current state it is very important that the review is done not as it should be happening but as it is happening.  

Obeya or Oobeya refers to a form of project management and is a component of lean manufacturing.  Even more specifically, the Toyota Production System.  The obeya is a similar concept to a "bridge room" or a "war room."  
  During the product and process development, all individuals involved in managerial planning meet in Obeya to speed communication and decision-making. This is intended to reduce "departmental thinking" and improve other methods of communication which tend to introduce forms of waste into the process. 
  Conceptually akin to traditional “war rooms,” an Obeya will contain: visually engaging charts, graphs, milestones, progress, countermeasures and any other forms of critical information for attendees to make decisions accurately and efficiently.

​Reference:  Wikipedia - Obeya

  The bullwhip effect can be described as an extreme change in the supply chain upstream that is normally triggered by a small change in demand downstream.  This often affects inventory levels which can shift from being on backorder to being in excess of the needed demand.  The general cause of these fluctuations within the supply chain is almost always related to communication.  As communication travels up the supply chain with various forms of waste and delay amounts, times and the accuracy tend to "whip" further from the actual need.  The one sure fire way to eliminate the bullwhip effect is to align supply with demand, including completely transparent communication and synchronization of the supply chain perfectly.  

Reference:  Apics Dictionary 2015 - Bullwhip effect.