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#AVERAGE SALARY FOR INVENTORY MANAGER SOFTWARE#

Maximum Stock Level = Reorder Level + Reorder Quantity – (Minimum Consumption x Minimum Reordering Period)įor example, if you know that when inventory touches 1000 units (reorder level), you must order 500 units (reorder quantity), and that your goods take at least 5 days to reach you from a vendor (minimum reordering period), and also that you sell a minimum of hundred units every day (minimum consumption), the maximum amount of stock that you need to keep in the inventory is a 1000 units. This number is influenced by several factors- the perishability of goods, the amount of warehouse space you have, changes in consumer preferences, etc. Maximum Stock LevelĪs the name implies, this is the level of stock indicated by a number beyond which you simply shouldn’t stock up on a particular product. Well, at least it may seem like jargon, but these terms that are casually thrown around in inventory management can help you understand better. Key Inventory Management Terms You Need To Know The fundamental principle of inventory management revolves around placing an order for goods at the right time, with the right source that can provide you with the right quantity at the right price and the right quality. Moreover, you can significantly reduce the time between order and delivery by having your own stock. When you buy in bulk, you also have an advantage when it comes to price negotiations. Having your own inventory helps hedge against the great uncertainty that is consumer behavior. Or your vendor may increase the price of a product you agreed to sell for way lesser. Is it not just simpler to ask a supplier to send you products as and when you have some demand for them? The issue, however, lies in the fact that we never know for sure what a customer’s spending pattern is.įor example, it is possible that your manufacturer cannot keep up when your demand peaks. You may have often wondered why you even have any inventory at all.

Frequent review and adjustment of InventoryĮfficient Inventory Management is critical for manufacturers, retailers, and brands because it is how they treat their core business and extract value from the process of buying and selling.

Movement of inventory from one location to another.

Naming your physical locations, down to the shelf level.

A system of naming for your inventory items (also known as Stock Keeping Units, or SKUs).

Inventory Management is a broader topic that covers the following aspects: What are the elements of Inventory management?

fulfill orders on time so as to build customer loyalty.

block the least possible working capital at all times.

As a retailer, your job is to manage inventory smoothly and at as low a cost as possible so that you can The process of inventory management begins from the time you raise a purchase order and ends (for every order) when an order is fulfilled/ delivered to the end customer. It covers all aspects of stock management across the supply chain from the manufacturer to the point of sale manned by the retailer. Inventory Management is the science of purchasing, supervising, controlling and dispensing of Stock for Sale which is stored in a facility. A typical retailer only holds this type of inventory.

finished product: as the name suggests, this is the assembled product that is ready for a sale.

work-in-progress: this includes all of the parts you manufacture but are yet to assemble.

raw material: this includes all of the material that you will use to produce a certain product.In the manufacturing industry, inventory is divided into three major types for ease of accounting.

This is the product that is ready for a sale. What are the types of Inventory?įor a retailer, there is usually only one type of inventory. It is measured in units of stock as well as the value of the stock you hold.

In a retail context, very simply, Inventory refers to your raw material as well as the stock finished goods of products that you sell.

#AVERAGE SALARY FOR INVENTORY MANAGER SOFTWARE#

The need for inventory management software.

Strong fundamentals – Name your SKUs correctly.

For what quantities should I raise a purchase order?

Inventory Management Formulas to Help You Along.

Key Inventory Management Terms You Need To Know.

What are the elements of Inventory management?.