Part 3 Maintaining the Right Level of Inventory
- Analyze sales data.
- Decide how much stock to order and keep.
- Consider order and delivery times.
- Choose a re-order point.
- Arrange to have some "safety stock" to get you through shortages from unexpected events.
- Consider using an outside inventory management agency.
Keeping this in view, how do you manage your inventory?
Here are some of the techniques that many small businesses use to manage inventory:
- Fine-tune your forecasting.
- Use the FIFO approach (first in, first out).
- Identify low-turn stock.
- Audit your stock.
- Use cloud-based inventory management software.
- Track your stock levels at all times.
- Reduce equipment repair times.
What are the different types of inventory methods?
The most commonly used inventory valuation methods under a perpetual system are:
- first-in first-out (FIFO)
- last-in first-out (LIFO)
- highest in,first out (HIFO)
- average cost or weighted average cost.
What is the process of inventory management?
Effective inventory management is all about knowing what is on hand, where it is in use, and how much finished product results. Inventory management is the process of efficiently overseeing the constant flow of units into and out of an existing inventory.