Inventory Management 101 Part 1

Selriel By Selriel, 8th Oct 2015 | Follow this author | RSS Feed | Short URL http://nut.bz/vjm-1rf0/
Posted in Wikinut>Business>Supply Chains, Procurement & Logistics

I have been in retailing business for almost a decade and still researching on how to improve inventory management. For part one let us start with basic inventory management.

Inventory Management

This topic is very broad and will be discussing this into parts. I will elaborate first the importance and role of managing inventory in businesses and society.

What is Inventory?

According to Merriam-Webster dictionary, Inventory is a complete list of the things that are in a place. Sure it is simple definition, right?

However managing inventory is not that quite easy as you think. When supplies are purchased but are not for immediate consumption, these are inventories. One simple way of tracking inventory is to maintain a level of stocks enough to ensure continous production of right quantity but but not low to have excess raw materials in storage. This is called inventory control.

Management role on Public Safety

Inventory management has been considered as a critical component of a well-manage businesses most especially companies producing perishable or goods with obsoletion.

Product recalls have been in the headlines after reported cases of sickening of people after consuming products with contamination. Due to improved inventory management, a quick response to trace back the source of the contamination and warnthe people of possible health hazards. Food safety is the primary beneficiary of this system.

Importance on Business Industry

Over production my lead to over stocking and if not disposed on right time, will be simply wasted. When the inventory is high, a bigger space is required, money is tied up and tracking of inventory on hand is more difficult than maintaining lower inventory.

On the other hand, producing not enough quantity may lead to short in finished goods and may lead to customer disappointment and dissatisfaction.

Tags

Control, Inventory, Inventory Sales, Inventory Shrinkage, Investment Opportunities, Investment Strategy, Management

Meet the author

author avatar Selriel
An accountant who is fond of writing poems.
I love being a writer, it gives us the opportunity to tell stories, to create a character, to design a situation and be God of our own writing.

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